Bitcoin's Hashrate Plummets as Cryptocurrency Miners Struggle to Stay Afloat

Francisco Memoria
  • Bitcoin's hashrate has dropped nearly 44% since its all-time high in August.
  • The decline comes as miners are struggling to stay afloat, and reports suggest old mining machines are being sold according to their weight.

Bitcoin’s hashrate has recently started plummeting as cryptocurrency miners are currently struggling to stay afloat. Behind the drop are the increasing competition miners face, and the extended bearish trend the crypto market has been enduring.

According to blockchain data, bitcoin’s hashrate has dropped from an all-time high of 68 exahash in August, to 34.7 exahash this week, a 43.8% decline.

Bitcoin's hashrate this year

Notably, the flagship cryptocurrency’s hashrate surged after last year’s bull run that saw it get close to the $20,000 mark. Available data shows that in January of this year it was at little over 15 exahash, up from 2.5 in early 2017. So far this year, BTC’s hashrate is still up 131%.

The hashrate drop is nevertheless concerning. It means miners are no longer being able to stay afloat after the flagship cryptocurrency’s price plummeted from about $13,000 at the beginning of this year to roughly $4,320 at press time.

Since late August, when the hashrate started dropping, CryptoCompare data shows the flagship cryptocurrency’s price dropped from a $8,500 high to enter a range revolving around the $6,400 mark, before plummeting to under $5,000 for the first time since October of 2017

Bitcoin's price performance since its hashrate started dropping

Recently, reports have suggested that in China, old mining machines are currently being sold according to their weight, at prices as low as one-twentieth of their original value. They’re being bought not by other miners, but allegedly for scrap metal and other parts. The country’s dry season has seen miners who depend on hydroelectric power struggle.

As the co-founder and CEO of F2Pool Mao Shixing recently stated, miners are focusing on surviving the bearish trend. As reported, he stated that in the future “house appliances [will be] used to mine cryptocurrencies and mining equipment running on cloud computing and AI will be the directions for the space.”

According to Shixing, bitcoin’s halving in 2020 – which will see block rewards drop from 12.5 BTC to 6.25 BTC – will have “little impact” on the cryptocurrency as we “mentally prepare ourselves” for it.