On Christmas, Bitcoin’s hash rate hit an all-time high of 544 exahashes per second, capping off a year of impressive growth aligned with its 163% price increase since January.
Influential Bitcoin proponent Max Keiser recently suggested on social media that with hash rates so high, Bitcoin’s price could surpass $400,000. While provocative, this prediction sparks debate on potential price models.
In reality, the parallel climb in hash rates and price presents challenges for miners now grappling with substantially decreased profits. Higher hash rates mean more computational power is required to mine blocks, elevating operational costs.
The euphoria around the new hash rate record has been dampened by the declining hash price, a key mining profitability metric, over the past week. Currently at $0.09 per terahash per second per day, the drop is attributed to waning interest in the BRC-20 ordinal inscription trend that previously spurred demand and higher fees.
Profits have noticeably decreased since the 2023 peak on December 17, reflecting the inscription hype fading. While headline-grabbing predictions may fuel speculation, Bitcoin’s underlying mining economics spotlight diminishing returns. The network’s continued security and growth rely on ensuring mining remains profitable long-term.
