Bitcoin network fundamentals continue to surge to new heights, with the latest data showing that both difficulty and hash rate are expected to hit new records this week. While Bitcoin’s price remains stagnant at $30,000, the network fundamentals have been on the rise, reflecting a significant turnaround for miners. As BTC/USD added 70% in Q1 alone, mining participants saw some much-needed relief after the bear market squeezed profit margins to practically zero. Difficulty, which reflects competition for block subsidies, has made new all-time highs for the past two months, and this week will be no exception. According to data from BTC.com, the difficulty will increase by approximately 2.1% on April 20, reaching 48.91 trillion, a full 13 trillion higher than at the start of the year alone.
Bitcoin network hash rate is also estimated to be higher than ever, with raw data from MiningPoolStats etching a new all-time high of 418 exahashes per second (EH/s) on April 18. While hash rate estimates are far from concrete and can be misleading, some commentators continue to watch the metric keenly as it drifts ever higher. A key focus is Russia, which has reportedly become the world’s second-largest miner in 2023, according to a report in Russian-language news outlet Kommersant. While this has led to concerns that governments with a majority hash rate share could pressure miners to censor transactions, others believe that the real “danger” is using that hash rate for its intended purpose – earning Bitcoin. “Adversaries hypothetically using hashrate to censor #btc transactions is a distraction from adversaries actually using hashrate to earn #btc revenue,” Pierre Rochard, vice president of research at Riot Platforms, wrote in part of a recent commentary on the topic.
A look at the current state of miner balances shows that on a rolling 30-day basis, BTC sales are increasing. On April 18, miners decreased their Bitcoin holdings by 648 BTC compared with one month ago, according to data from Glassnode. The changes are significant compared with sell-offs that accompanied the FTX implosion in Q4 last year. As the network fundamentals continue to surge, it remains to be seen how this will impact Bitcoin’s price in the coming weeks and months.
It is worth noting that this article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.