Bitcoin’s hash rate, i.e. the computing power of the network, recently hit a new all-time high, amid the frenzy that accompanied the debut of spot Bitcoin ETFs in the U.S. According to data from InHetBlokBitcoin hashrate hit a record high of 630.91 million TH/s or 630 EH/s on January 11, less than 24 hours after the US Securities and Exchange Commission approved 11 Spot Bitcoin ETFs in the country.
Bitcoin’s hash rate hit a new all-time high yesterday
https://t.co/bkdHCcEXFk pic.twitter.com/Mn3GxyDp6d
— IntoTheBlock (@intotheblock) January 12, 2024
Bitcoin hashrate reaches record highs
The hashrate measures the total combined computing power used to mine new bitcoins and process transactions. The Bitcoin mining hashrate has been steadily rising since 2021 regardless of market sentiment, whether bullish or bearish, making Bitcoin the most secure cryptocurrency network. Based on the information provided by Coinwarz, the hashrate started 2023 at 266 EH/s and ended the year at 598 EH/s, a growth of 125%.
The hashrate further spiked to an all-time high of 630 EH/s on January 11, and the timing was no coincidence. The hashrate increase came shortly after the SEC approved the first US Bitcoin Spot ETFs, opening the doors for mainstream investors to invest in the top cryptocurrencies without actually owning the assets.
https://x.com/intotheblock/status/1745826801106956323?s=20
Bitcoin’s hash rate hit a new all-time high yesterday
— IntoTheBlock (@intotheblock) January 12, 2024
As expected, the approval of these ETFs led to a flurry of activity in Bitcoin, putting pressure on its price volume on the chain to the highest level since the collapse of crypto exchange FTX. Consequently, the hashrate has also increased, indicating that miners are ramping up activity in anticipation of the increased interest and trading volume that often follows the launch of new ETFs.
BTCUSD currently trading at $42,984 on the daily chart: TradingView.com
BTC price and mining profitability drop
The adoption of spot ETFs is a sign of mainstream adoption that strengthens Bitcoin’s credibility. Despite the increase in trading volume and network growth, Bitcoin’s price appears to have deviated from this positive trend. The crypto price initially reacted positively to the adoption of the spot ETFs, push over it $48,600, the highest since April 2022. In a dramatic turn of events, this peak has since reversed, giving the idea of a “sell the news event.”
At the time of writing it is Bitcoin has retreated 11% from this local high and trading just above $43,000. Trading volume has also fallen by 62% in the last 24 hours.
Bitcoin mining profitability, which saw steady growth in December, has not responded positively to the adoption of spot ETFs. According to data from Hashrateindexthe drop in Bitcoin prices led to mining profitability falling to $0.07958 per terahash/second per day on January 13, down 22% from $0.10270 per terahash/second per day on January 1.
Featured image from iStock
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