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Bitcoin hash rate has taken a dip, falling to its lowest this year since August amidst the red market chaos. As Bitcoin price drops sharply to $4,500, according to eToro senior analyst Mati Greenspan, this has led to some miners shutting their rigs down.
Bitcoin Hash Rate Declining but Still Up Sharply
Bitcoin is crashing down. In just over a day, prices have fallen from $5,600 to $4,400. At the time of writing, Bitcoin has been trading at $4,455 with 24-hours losses of 17 percent.
Amidst the red chaos in the crypto market, Bitcoin hash rate is taking a hit as well. If we take a look at the one year chart, the Bitcoin hash rate has been climbing upwards. It reached its highest on November 1, 2018, as shown in the graph below.
Bitcoin Hash Rate chart, Source: bitinfocharts.com
However, since then, it has taken a steep fall. The last time the Bitcoin hash rate went down this low has been in August this year. This was the time when Bitcoin price tumbled from $8,200 at the end of June to $6,150 in August.
As pointed out by Mati Greenspan on Twitter, Bitcoin hash rate might still be up since the beginning of this year, but it has taken a sharp fall.
What do you think will happen when the average price of mining BTC will surpass the falling price of BTC?
— Bart (@wonderjunkie1) November 20, 2018
Hashrate in simple terms is basically the speed at which a mining machine operates. And crypto mining involves creating blocks with complex computations.
2018 have been a bear crypto market that negatively affected the profitability of the crypto mining. But miners have been able to generate billions in profit in the first half of the year.
Not long ago, Diar released a report that states only large pools will be able to earn on Bitcoin mining now:
“With big mining operations on low electricity costs running at anywhere between 50-60 percent gross profit from Bitcoin revenues, the market has a lot of room left to grow and, profits to squeeze. But Bitcoin mining has, at least for now, and most likely in the future, moved into the court of bigger players with deep pockets.”
Now, with the drop in Bitcoin hash rate, the difficulty is also decreasing. The BTC earned in mining and transaction fees is also losing value. This would lead to the exit of miners from the market, especially smaller ones.