Bitcoin's mining hashrate has hit a new all-time high. This comes despite the cryptocurrency's recent price slump. The move suggests miners are betting on a future rally.
The hashrate measures the total computing power on the Bitcoin network. It's a key indicator of network health and miner confidence. A rising hashrate typically signals optimism among miners.
On-chain data shows the 7-day average hashrate recently spiked. This push came near the end of July and set a new record for the metric.
But the high was short-lived. The indicator saw a rapid decline soon after. It wasn't until mid-August that the metric started to recover.
This recovery held steady for a while. But the indicator ended August on a low note, simply retreating to earlier lows.
Why the rollercoaster ride? The answer might lie in Bitcoin's price action.
Miners make most of their money from block rewards. These rewards are fixed in Bitcoin terms. They're also given out at regular intervals.
So, there's really only one variable that matters: Bitcoin's dollar value. When the price goes up, so does miner revenue. It's that simple.
The late July hashrate peak coincided with Bitcoin's rally towards $70,000. The subsequent decline? That happened as the asset took a nosedive.
But here's where things get interesting. Since September started, the hashrate has been climbing. And get this - it's happening while Bitcoin's price is tanking.
It's a head-scratcher, for sure. But it suggests miners are feeling gutsy. They're expanding operations, likely betting on a future price surge.
We've seen this movie before. Earlier this year, a similar hashrate trend preceded Bitcoin's rally to its all-time high price.