The latest published Glassnode report focuses on Bitcoin mining amidst the almost consistent prices of Bitcoin and all-time high difficulty adjustment level for mining. The Bitcoin hashrate has touched an all-time high, up to 321.15 EH/s.
Considering the market scenario, as a bear market with fear and various global tensions, Bitcoin prices have maintained uniformity for a while. However, Glassnode, while finding the reason behind the all-time high hashrates cites the reasons as more hashpower is being held by better capitalized publicly traded mining companies or states the possibility of it just being a Bitcoin game theory. It further states that the situation has been volatile as mining revenue has kept a low profile while the cost of production for a Bitcoin has been rising in parallel to the electricity prices, thus creating income stress on the mining industry.
As per Glassnode, the Bitcoin hash-ribbons, the ratio between two simple moving averages (SMAs) of the hashrate commenced unwinding in late August. This indicates that mining conditions were improving, and the hashrate was getting back on track. The pattern followed the usual trend, where better conditions followed hash-ribbons unwinding.
However, Glassnode states that with the flat-lined Bitcoin pricing, the rising hashrate is due to efficient mining hardware capacity and the miner’s access to superior balance sheets with a larger share of the hashpower network. One of the theories also suggests that the approximate 66% increase in difficulty and hashrate since October 2020 is relevant to an approximate halving in revenue per hash.
To answer the all-time high of hashrates, the Puell Multiple is used, a cyclical oscillator to compare the current daily mining revenue to their yearly average. As per the Puell Multiple indicator, the mining business is gaining grounds against previous performance. Facts support the analysis that in June, the indicator hit its lowest at 0.33, i.e., miners were earning just 33% of their yearly average against the current trend of 0.63.
Glassnode calls this term of increase as “a true bear market low is established”; however, it considers the various factors and risks of the market. To estimate the risk, it calculated the aggregate size of miners’ balances to be 78.4K Bitcoin stating that the owners of the reserve might face troubles in coming times; however, it is doubtful that the entire amount would be distributed.