Bitcoin’s hashrate has been on a downward trend, reaching approximately 550 exahash per second (EH/s) based on the three-day simple moving average. Following the halving event, onchain costs have significantly decreased, with transfer fees ranging from $1.50 to $3.65 per transaction.
Over the course of 16 days, Bitcoin’s hashrate has experienced a decline of 19%. This information is based on statistics that show the three-day simple moving average (SMA) for Bitcoin’s hashrate, which is more volatile compared to the seven-day SMA. On April 24, 2024, the three-day SMA reached a peak of 685 EH/s, while the all-time high for the seven-day SMA stands at 655 EH/s. The network has seen a subtraction of approximately 135 EH/s using the 72-hour average, resulting in a 19.7% decrease in hashrate since the ATH.
Following the recent halving event, onchain fees have significantly decreased since April 24. On that date, the average onchain fee was $28, but it has dropped to just 0.00006 BTC or $3.65 per transaction after 16 days. Current data from mempool.space shows that fees range from $1.50 to $1.96 for low to high-priority transactions. However, there are still over 216,000 transactions pending confirmation in the mempool.
The congestion in the network is a result of continued high activity across financial transfers, Ordinal inscriptions, and Runes protocol engagements. While a record high of over 927,000 transactions was confirmed on April 23, the daily transaction confirmation rate has now adjusted to between 400,000 and 700,000. Despite the high number of daily confirmed transactions, fees have significantly decreased as users are opting to pay fewer satoshis per virtual byte (sats/vB) on the Bitcoin network.
Bitcoin miners are also dealing with fluctuations in BTC’s market value, which has struggled to stay above the $60,000 mark per unit, experiencing a 3% decline this week. Combined with reduced fees and lower rewards, the hashprice, which represents the cost per petahash per second (PH/s) per day, has dropped to around $48. As the hashprice continues to decrease, profitability diminishes, leading to a reduction in overall hashpower.
The ongoing decline in profits and market value fluctuations may result in further reductions in the network’s computational strength. This could lead to changes in mining profitability and difficulty. The network recently underwent a significant difficulty retarget, with a 5.62% decline at block height 842,688 in December 2022. Current estimates suggest that another difficulty reduction may be on the horizon.
What are your thoughts on the future of Bitcoin’s mining profitability as the network faces volatile changes? Share your insights in the comments below.
