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01 Aug 2022
The Bitcoin hashrate rebounds following difficulty reduction
The Bitcoin hashrate has seen a significant uptick after Bitcoin reduced its mining difficulty two weeks ago.
The Bitcoin hashrate plummeted in June and July due to the declining bitcoin price and surging electricity prices in the US, making mining unprofitable for less efficient miners.The falling hashrate led to the largest difficulty reduction in one year. The reduced mining difficulty, combined with the recent bitcoin price increase, has improved the profitability of mining. The mining revenue increased by 5% over the past week and is now $21.5 million, a significant growth from the bottom of $17 million two weeks ago.This mining profitability increase incentivized miners to plug in their machines again, and the hashrate saw a nice rebound over the past two weeks.The rising hashrate has lifted the block production rate to 6.13 blocks per hour, a bit higher than the target rate of 6. To adjust the block production rate down towards the target, the difficulty will likely increase by around 2.3% on Thursday.Source: Blockchain.comSource: BytetreeOther than that, on-chain activity continues to stay muted. The number of active addresses remains near one-year lows, and the demand for making bitcoin transactions is falling.The average transaction value declined by 16% over the past seven days. The lower demand for block space combined with the higher block space supply due to the rising block production rate has led transaction fees to plummet by 28%.