The Bitcoin network is experiencing a substantial decrease in hashrate, showing a 19.7% drop from last month’s peak. The three-day simple moving average (SMA) has fallen sharply to about 550 exahash per second (EH/s) from the 685 EH/s recorded on April 24, 2024. This rapid decline represents a significant loss of roughly 135 EH/s from the network in just over two weeks.
Reduction in Transaction Fees
Post-halving adjustments have also led to a dramatic reduction in transaction fees. From a high of $28 on April 24, fees have plummeted to as low as $1.50 for lower priority transactions and $1.96 for higher priority ones, based on the latest data from mempool.space. Despite these reductions, there is still a considerable backlog in the mempool, with over 216,000 transactions awaiting confirmation.
Impacts on Mining and Network Activity
These shifts are impacting Bitcoin miners significantly, as they grapple with fluctuations in the cryptocurrency’s market value. Currently struggling to maintain a stable position above the $60,000 mark, Bitcoin’s price has declined by 3% this week. Consequently, the hashprice, or the revenue generated per petahash per second (PH/s) per day, has fallen to approximately $48, indicating a downturn in mining profitability.
Also Read: Tidal and Hashdex Revolutionize ETF Market with New Spot Bitcoin Offering
Network Adjustments and Future Outlook
The network recently underwent its most significant difficulty retarget since December 2022, decreasing by 5.62% at block height 842,688. This adjustment signals potential future decreases in difficulty, reflecting ongoing shifts in network dynamics and mining profitability.
The trends in Bitcoin’s hashrate and transaction fees underscore significant shifts in cryptocurrency market dynamics, particularly in how network participants are responding to major events like halving and market fluctuations. As miners and users adapt to these new economic realities, further impacts on network performance and profitability can be anticipated.
