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The choppy market has caused severe headwinds for Bitcoin miners as the hash rate reaches new record highs. The rise comes ahead of the much anticipated halving event slated for next spring that is expected to catalyze the largest crypto asset’s price action.
Recent data suggested that Bitcoin’s hash rate has increased by nearly 661% in the last two years. According to CryptoQuant CEO Ki Young Ju, such a feat demonstrates that the “network fundamentals are the strongest ever.”
#Bitcoin‘s network fundamentals are the strongest ever, with a 661% increase in hash rate in two years.https://t.co/IwcFXPKOjH pic.twitter.com/rczHpmZ9lC
— Ki Young Ju (@ki_young_ju) July 19, 2023
The hash rate can be referred to as the computational power used to mine a cryptocurrency. The upcoming halving event will slash the miners’ rewards by half.
The rising hash rate comes the backdrop of an all-time mining difficulty of the network, which currently stands near 54 trillion.
The Ordinals’ craze has a crucial role to play as well, as Bitcoin miners started deploying more and more mining machines, thereby boosting the network’s computing power.
While high hash rates and mining difficulty hovering near record highs indicate that miners are bullish on Bitcoin, that has not stopped them from selling large volumes of BTC to crypto exchanges at a profit, as per Bitfinex’s latest study. Such a trend “potentially showcases new miner behavior.”
Meanwhile, JPMorgan analysts suggest that Bitcoin’s price, as well as the transaction fees, will need to rise significantly to compensate for the lower block reward following the upcoming halving event, especially with volatile electricity costs and increasing competition among miners that has shot up the cost of production.
The multinational investment bank previously predicted that Bitcoin could go up by another 75% this year if it gets embraced as a similar investment tool as gold.
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