Key Takeaways:
- Bitcoin mining hashrate increased by 75% since Nov. 2021.
- Can the increase help BTC/USD that struggles near $30K?
- Experts assume a focus on solar and wind energy could facilitate Bitcoin mining, and, by extension, BTC price.
YEREVAN (CoinChapter.com) – Bitcoin (BTC) mining hashrate increased by 75%, noted Ki-Young Ju, the chief executive of analytical platform CryptoQuant. The graph below illustrates the said increase, as the CEO saw a bull-run ahead for the flagship crypto.
Can an increased hashrate affect the BTC price?
In detail, the mining hashrate measures the computational power per second used when mining, or simply mining speed. On May 23, the metric stood at nearly 200 EH/s (exa hashes per second). It means that all the miners across the network calculate the cryptographic hash function approximately 200 quintillion times per second.
Also read: Bitcoin (BTC) holds $30K and hints at bottoming out – here's why.
However, the correlation between the Bitcoin price and the mining hashrate is not evident. For example, Gabriel Wong, the co-founder of Cyberdyne Tech Exchange, thinks the two metrics impact each other.
When the Bitcoin prices are high, the hash rate tends to increase as more miners join the network due to fatter margins. As the price goes down, the margin shrinks, and fewer miners (especially the less-efficient ones) can remain profitable.
said the expert.
BTC grapples with $30K
Meanwhile, the BTC price stood at just above $30,300 in Monday’s Asian-Pacific session after closing the eighth consecutive week in the red. While the hashrate increased considerably, the Bitcoin value more than halved since its peak in Nov. 2021.
Also read: More troubles ahead for Bitcoin (BTC) & cryptos as cash holdings go up.
Thus, the current dissonance between the BTC price and the high hashrate could signify that the miners expect Bitcoin to bottom out soon. Moreover, Ki-Young Ju also asserted that “energy companies will drive the next BTC bull-run alongside traditional finance institutions.”
Greener energy for crypto mining
The CryptoQuant CEO further asserted that Bitcoin mining would soon shift to wind and solar energy as they became more cost-effective. As of publication, 62% of Bitcoin miners globally use hydroelectric energy, while solar and wind take the back seat with 15-17%.
Several companies have already taken steps toward switching to solar energy. For example, in April 2022, Jack Dorsey’s Block, electric car giant Tesla and blockchain tech company Blockstream united their forces to use solar energy for Bitcoin mining in Texas.
Also read: New York set to become first U.S. state to ban Bitcoin mining.
Moreover, Nic Carter, a partner at VC firm Castle Island Ventures, asserted that “adding bitcoin mining as an offtake dramatically improves the economics of new wind and solar installations.”
Thus, greener energy sources and Bitcoin mining could go hand-in-hand, driving each other forward. But, as Young Ju concluded in his Twitter thread, “the market is cold, but the fundamentals are full of heat from mining rigs.”
