Bitcoin Hash Rate Plummets 17% From All-Time High

How often does hash rate fall this significantly? Miner monthly revenue nears 2017 levels. Hash price is now 48% up from the lows.

In today’s issue, we wanted to highlight the recent moves in Bitcoin mining. Before digging in, we’re excited to announce that the production of our July monthly report is well underway. The report will cover the extremely unique macroeconomic landscape, touching on everything from energy markets, foreign exchange, liquidity dynamics across markets, and Federal Reserve policy. The report will also dive into Bitcoin-native metrics, providing readers an in-depth yet simplified look into the state of the Bitcoin network from a fundamental level. Focusing back to today, we’re covering the latest in the mining industry. 

State Of The Mining Market, July 2022 

The network continues along every block just fine but the mean hash rate has suffered a decent hit over the last month falling 17.4% from the recent all-time high. A lot of the hash leaving the network that we’re seeing is because 1) hash rate following a lower bitcoin price as older machines become unprofitable on the margin and 2) impact of the recent heatwave in the United States and curtailment especially in Texas. As energy demand soars in the summer months and electricity prices rise with it, we can expect periods of industry-scale miners shutting down hash rate as per their power agreements.  

There’s only a handful of times in Bitcoin’s history when we’ve seen hash rate drop this much. Yet it’s still up 13.93% this year, while bitcoin price is down 56%. 

As a result, the difficulty adjustment had its largest downward revision (5.1%) since the Chinese mining ban, which was the third downward adjustment in a row, and fourth out of the last five two-week (technically: 2016 blocks) epochs. This is a welcome sign for miners’ profitability who can stay online. With the adjustment and the recent price rally off the lows, hash price has rebounded 48% of its lows to back over $0.10 (at least for now).