Bitcoin miners (BTC) raised $ 60 million in an average of 30 days as of May 5, showing the first signs of recovery from a sharp drop in earnings last month following massive cuts in energy-rich provinces in China.
In April, coal mine accidents and subsequent inspections in Xinjiang provide power to the regional mining industry. He forced the miners to turn off the ASIC hardware, which generates computing power only to protect and “work” Bitcoin Proof of Work.
Bitcoin mining revenues have declined from a 30-day average peak of $ 60 million on April 16 to $ 57.08 million on May 2, according to Blockchain.com data. The resource collects miner data from block bonuses and transaction fees paid to miners.
Bitcoin miners income. Source: Blockchain.com
The drop in profits coincided with a drop in the hash rate of the Bitcoin network, which meant that many ASIC miners were shut down after losing their main power supply. The overall hash rate per second (on average over seven days) fell from a record high of 172 previous hashes per second on April 16 to 131 EH / s on April 23, or almost 30%.
Bitcoin hashing speed. Source: Blockchain.com
It has since recovered to 168 EH / s on May 5, indicating that miners are resuming their bitcoin business after a significant drop in mining four days ago.
Impact on bitcoin spot prices
Bitcoin prices plummeted after the Chinese went out of business.
The standard cryptocurrency has already corrected downward after hitting an all-time high of around $ 65,000 on April 14. Research and Development in China – Fear, Uncertainty and Suspicion – Sales accelerated tremendously, causing the BTC / USD exchange rate to drop to USD 50,591 on April 25.
1-day BTC / USD chart (Coinbase). Source: TradingView
Bitcoin price and hash rate fall almost simultaneously, further evidence of a higher positive correlation between the two accounts.
In simple terms, hash rate represents the processing power of the Bitcoin network. This means that the higher the hash rate, the higher the theoretical cost of “attacking” Bitcoin, making this metric value synonymous with network security.
Bitcoin price has rebounded to just over $ 55,000 as of May 5, which matches hash fluctuations perfectly, which means the network reset helps maintain the prevailing bullish sentiment for the cryptocurrency.
The headwind comes from more than just Bitcoin mining estimates. For example, data from BTC.com shows that this data should be increased by a modest 1% during the next two-month adjustment (or 2016 ban period) on May 13.
Network complexity, which shows how difficult it is for nodes in the Bitcoin network to solve the equations needed to mine, dropped by 12.6% on May 2. This tends to increase margins for both underperforming and underperforming miners and promises less risk for Bitcoin sales. by the manufacturer.
Meanwhile, with a more likely upward revision and increased mining activity on the Bitcoin network, long-term cryptocurrency valuations remain bullish.
A previous report from Cointelegraph compared the relationship between the price of Bitcoin and the challenges of retail and mining, excluding that the former had a lagging relationship with the latter, despite the popular “price follows retail” mantra.
The BTC / USD exchange rate closed at $ 28,990 in 2020 after Bitcoin network troubles dropped to 17,438 terashes per second from 19,679 TH / s in the November-December 2020 session.