Bitcoin Hashrate Rises to New High as Miners Realize Losses – CryptoQuant

The hashrate of the Bitcoin network hit a new all-time high earlier this week following an increase in sales by smaller mining entities. At the same time, the miner hash price has fallen to an all-time low.

According to a report by CryptoQuant, Bitcoin’s hashrate currently stands at 627 exahashes per second (EH/s), which represents a significant recovery from an 8.5% reduction in July. The surge comes as BTC struggles to hold above $58,000 and is trading at a level 20% below its all-time high of $73,000.

Miner hashrate increase

The increase in hashrate results in more difficulties for miners because mining each block becomes more difficult and competitive, requiring more computing power and increased energy costs. However, this event also means high security for the larger blockchain.

Bitcoin’s hash price, a metric that measures how much a miner can earn per amount of mining computing power, plummeted to an all-time low of $0.038 per TH/s. Shortly after Bitcoin’s halving in April, this metric hovered around $0.05 per TH/s. This decline also coincides with a mining capitulation that occurred last week.

Miner outflows surged as BTC briefly dropped to $49,500. Outflows from this cohort of market participants surged to 19,000 BTC on August 5th, the highest level since March 18th.

This indicated that miners sold some of their holdings as their average profit margins fell to 25%, the lowest since January 22. During the sale of their reserves, some miners realized losses due to the fall in the value of bitcoin. They saw the biggest daily loss since May 29, a whopping $22 million.

Smaller miners sell

Major Bitcoin mining entities have increased their holdings through steady accumulation despite the capitulation of miners. The current reserves of this cohort of market participants amount to 66,000 BTC.

Conversely, Bitcoin holdings of smaller entities have bottomed out. These miners may see further declines in their reserves as chain analysis shows more selling activity due to low profitability. CryptoQuant’s miner profit and loss sustainability metric indicates that miners are still underpaid, especially as mining difficulty is increasing and prices have fallen.

On the brighter side, miner capitulation events and higher miner exits tend to occur near local BTC price bottoms during bullish cycles. This means that a bitcoin rally may be on the horizon.

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