Don’t call it a comeback. Bitcoin’s hashrate “is on track to make a full recovery sometime in the next couple of weeks,” according to a Kraken Intelligence report. Nearly five months ago, China banned Bitcoin mining in its territory. The network didn’t even blink. The difficulty adjustment fell and the remaining miners held down the fort. As the Bitcoin community says: tick-tock next block.
The great migration of miners is almost complete. The Chinese mining companies had to shut down operations and move their equipment to friendlier countries. This was a record-breaking stress test, and the Bitcoin network passed it with flying colors. In fact, it seems to be healthier than ever.
Bitcoin hashrate made a 98% recovery in five months| Source: Kraken Intelligence
Bitcoin’s Hashrate By The Numbers
Enough talk, let’s go to the hard data. According to Kraken Intelligence:
“As of the time of publication, the 7-day moving average of hashrate has climbed nearly +98% to 166.1 EH/s after falling to a near 2-year low of 84.1 EH/s on July 3rd. In other words, Bitcoin’s current hash power must rise another +8.9% to revisit all-time highs of 180.8 EH/s last seen in May 2021. On-chain data shows that computational power deployed to the network is likely to continue heading higher and might hit a new all-time high in early December.”
It would be a mistake to bush off this show of resilience and trust in the network. The harshrate made a nearly 98% recovery and it’s a mere 8.9% from an all-time high. All of this in just five months? What an incredible feat! Bitcoin doesn’t care about anything that us mere mortals do, it just keeps pushing forward regardless. The difficulty adjustments provide another proof of that fact:
“BTC’s appreciation resulted in increasingly more hash power deploying on the Bitcoin network and a record-breaking 9 consecutive positive difficulty adjustments for a total +65.8% increase in mining difficulty and a 5-month high of 22.7T.”
As the five months went by, the stranded Chinese miners reincorporated to the network from other locations. That, and new people recognized the opportunity that the China ban brought, and started a mining business. The results are in and they can’t be argued with. Bitcoin’s hashrate is back with a vengeance.
BTC price chart for 11/29/2021 on Coinbase | Source: BTC/USD on TradingView.com
What About Mining Revenue?
Is it still profitable to mine Bitcoin? The answer will shock… no one.
“Miner revenue is near all-time highs as well and continues to rise. Since lows of $13.4M in late June, BTC’s daily miner revenue has rebounded to over $60M and is just below a record level of $76.5M set in April 2021.”
Boom! And that’s with the price stuck at the current levels. Some people think this cycle’s top is in. Others are even more courageous and already declared a bear market. Kraken Intelligence begs to differ. And to argue their point, they offer the Puell Multiple. What’s that?
“This on-chain metric assesses miner profitability and their incentive to sell or hold to better understand where BTC might move. The Puell Multiple is calculated by dividing the USD value of daily BTC miner revenue by the USD value of the 365-day moving average of daily miner revenue.”
And, what does the Puell Multiple says about the current situation?
“A reading below 0.5 has historically signaled BTC hitting a macro or micro bottom and mining profitability falling to unsustainably low levels. On the other hand, a reading above 3 has typically signaled a prime opportunity for profit-taking – as a reading above 3 has historically coincided with a market cycle top. With the Puell Multiple currently at a reading of 1.33, one could argue that miners are operating profitably yet haven’t reached a level to signal a market top.”
Remember, no tool is infallible, and you shouldn’t consider financial advice anything you read on NewsBTC. The Puell Multiple is at 1.33, though. And the hashrate made a nearly 98% recovery and it’s a mere 8.9% from an all-time high.
Featured Image by Diana Polekhina on Unsplash - Charts by TradingView and Kraken