- Analysts are divided on the recent 27% BTC hashrate decline over the weekend.
- A sustained drop in hashrate could weigh on BTC market sentiment.
Bitcoin’s [BTC] global hashrate has sharply dropped nearly 30% in the past three days, coinciding with the U.S. attack on Iran’s nuclear facilities.
Since the strike on the 21st of June, the hashrate declined from 954.6 EH/s to 693.5 EH/s, translating to a 27.3% drop as of press time.
In other words, computing power dipped or miners engaging in the Bitcoin network unplugged their machines.
Source: CryptoQuant
This signals short-term bearish sentiment. It may stem from factors beyond recent Israel, Iran, and U.S. tensions.
Iran’s BTC mining speculations
Some speculated that the sharp drop in hashrate after the attack suggested Iran may have been mining BTC using nuclear power.
El Salvador Bitcoin policy advisor, Max Keiser, also subscribed to the above line of thought. He reinforced BTC’s ‘hedging’ capacity in geopolitical tension. Keiser added,
“It points to Bitcoin as the almighty ghost in the global game theory machine and signals once and for all that Bitcoin is now firmly in charge, no nation state or group of nation states will survive Bitcoin.”
For Simple Mining, a repair firm for BTC mining equipment, the hashrate drop was ‘bullish for miner profitability.’ The firm noted,
“Hashrate is down over 37% since Friday. Price is down 7%. This is roughly equivalent to a 30% improvement in miner profit margins. A mined Bitcoin got 37% cheaper.”
Bitcoin’s mining outlook hinges on the upcoming network difficulty adjustment, which determines how hard it is to find the next block.
If difficulty drops, computing and energy costs would fall, potentially attracting more miners and boosting the network’s hashrate.
However, daily miner revenue has taken a hit, falling from nearly $50 million to $34 million over the weekend, according to Ycharts.
Meanwhile, MacroMicro data shows the production cost of one BTC was $98.6K as of the 21st of June. With Bitcoin trading at around $101K, miners are currently operating with only slim profit margins.
Source: MacroMicro
Others linked the recent hashrate drop to miners in Texas unplugging their machines due to higher electricity costs amid the summer heat wave.
That said, a higher cost of BTC mining could dent miners’ profitability and prompt them to sell their reserves. Hence, worth tracking this front in the short term for any structural adjustment.
