The Ethereum mining hash rate hit a new ATH level after fully recovering from Chinese measures.
Ethereum mining hash rate hits new all-time high
The hash rate of the ETH network has set a new record as the average daily hash rate reached 715k GH / s on Sunday. Since Ethereum currently still uses a Proof of Work (PoW) consensus mechanism, the nodes need a lot of computing power to add transactions to the blockchain. The “hash rate” of mining is the total measure of this computing power in the network.
The following diagram shows the development of the value of this metric over the years:
As the graph shows, before the current uptrend, Ethereum’s hash rate peaked at around 643k GH / s on May 20th. In June, however, the value plummeted to just 477k GH / s.
Why did the ETH hash rate crash?
On June 8th, the network hash rate was 618k GH / s. Only 16 days later, the value had sunk to the low point mentioned. The reason for the slump was China’s crackdown on mining. In May, the country reiterated its stance on cryptocurrencies, which led to a market-wide price drop.
Shortly thereafter, China also began cracking down on mining farms, causing miners to shut down. With a large portion of the global hash rate located in China, the measures caused the rate to crash. Some of the Ethereum miners sold their equipment on online websites and went out of business. In some listings on popular platforms, these miners were selling RTX 3060 GPUs for just $ 270.
Other miners migrated to other countries. When they moved to another location and resumed operations, the hash rate rose again. Since mining ETH has been quite profitable lately, more miners got on board during the low hash rate, and now, after the raids recovered, the metric has surpassed its previous ATH.
Profitability has increased not only because of lower competition due to the lower number of miners, but also because of price movements.
Over the past week, Ethereum’s value has continued to decline from its high of just under $ 4,000. It’s unclear where price will head next, but current price action looks bearish, at least in the short term.
Proof of text: Bitcoinist