While the price has recovered a major portion of the lost ground, the cryptocurrency’s hashrate (the total computing power dedicated to mining blocks on the blockchain) has declined a whopping 98 exahashes (EH/s) – that’s down 27% from the high of 135 EH/s observed on Monday.
The one-day hashrate often sees rapid fluctuations and provides less useful information about the broader trend. However, that average has also seen a drop to 114 EH/s from the pre-halving high of 122 EH/s.
The decline in the hashrate suggests some miners have scaled back or shut down operations following Monday’s halving of block rewards from 12.5 BTC to 6.25 BTC, which makes returning a profit harder or impossible with older mining machines. The halving was expected to crowd out some miners, especially the ones using older-generation mining devices like Bitmain’s Antminer S9s.
Alex de Vries, founder of financial and economic news portal Digiconomist and blockchain specialist, said, “S9s miners have already lived longer than expected and bitcoin’s price will have to double for these machines to become viable again.” He’s also predicted a decline of up to 20% in the hashrate in the short term.
Some observers believe the miner capitulation happened during the first half of March when the cryptocurrency’s price fell from $9,000 to $3,867. “We already had a mini halving in March due to the price crash. We don’t expect a big drop in the hash rate in the short-term (sic),” said de Vries.
A move above $13,000 looks unlikely right now, though a break above $10,000 cannot be ruled out because bitcoin balances on cryptocurrency exchanges have continued to decline post-halving – a sign of long-term bullish sentiment. Investors typically move their coins from wallets to exchanges during a price crash, or when they are skeptical about the sustainability of price gains.