What’s happening with the Bitcoin hash rate?
Analysts poring over charts have seen this metric slump lately, and according to recent reports, there’s an interesting seasonal explanation.
Coingape reports today that the decline in Bitcoin hash rate correlates to the end of China’s rainy season.
To those with little knowledge of Bitcoin mining and how it works, there is the assumption that Chinese miners worked on Bitcoin mining harder during the rainy season because they were stuck indoors.
Industry reports, though, show that there is a much bigger reason for the seasonal change.
Simply put, hydroelectric is a major source of power for Bitcoin mining, and one that is uniquely profitable.
So at the end of the rainy season, Chinese miners are moving off of hydroelectric platforms.
According to BlockCrypto, the miners are moving toward fossil fuel platforms.
“Bitcoin’s 7-day rolling average hash rate has dropped by over 10% since earlier this month — in large part thanks to the change in season,” writes Wolfie Zhao in syndication. “The average total computing power competing to mine Bitcoin was around 142 exahashes per second (EH/s) for the first two weeks of October, according to data from BTC.com. But since October 18, the 7-day rolling average of Bitcoin’s hash rate has declined by 11% to the current 126 EH/s. Meanwhile, Bitcoin’s price rose above $13,000 during the same period.”
Interestingly, the lower hash rate may end up making Bitcoin mining more profitable according to Colin Harper at Coindesk.
“For much of the year, the cryptocurrency has been less profitable to mine than ever. And that’s because Bitcoin’s collective hashrate – or how much computing power is pulsing through the network – has surged to consecutive all-time highs this year,” Harper writes.
Keep an eye on Bitcoin, its value, its hash rate, and how that influences the markets through the end of this year.
