Bitcoin's Hashrate Reaches All-Time High

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Hashrate Breaks Through 1 EH/s Barrier

On January 3rd, Bitcoin’s hashrate reached a new all-time high of over 1,000 exahashes per second (EH/s), according to data from CoinWarz. This milestone marks a significant increase in the network’s computing power, nearly doubling the hashrate from just one year ago.

Hashrate Growth

In January 2024, Bitcoin’s hashrate hovered around 510 EH/s. However, at the time of this article’s publication, it had retraced to approximately 780 EH/s. The rising hashrate indicates that Bitcoin miners are devoting more computational resources to the blockchain, thus improving the network’s security.

Miners Continue to Expand Production

Despite the April halving reducing mining rewards from 6.25 BTC to 3.125 BTC per block, miners continue to expand their production. According to CoinWarz, this indicates that Bitcoin miners are committed to securing the network and improving its overall health.

Miners’ Strategies

To overcome headwinds from the halving, some mining companies have adopted strategies such as acquiring other miners with turn-key facilities to increase near-term hashrate and expand their power pipeline. This is evident in JPMorgan’s research note shared with Cointelegraph on December 10th.

Miners Prioritize BTC Holdings

In addition to expanding production, miners have also prioritized accumulating BTC on their balance sheets. In December, JPMorgan raised price targets for four Bitcoin mining stocks to reflect the value of their electrical power assets and BTC holdings. This trend is expected to continue as miners look to maximize their returns.

MicroStrategy’s Impact

MicroStrategy, a software company turned de facto Bitcoin fund, has been a significant contributor to the trend. The company trades at a roughly 2.4x multiple to the value of its BTC treasury as of December 10th. Other prominent mining companies like Marathon, Riot, and CleanSpark also hold substantial BTC treasuries worth approximately $4.4 billion, $1.7 billion, and $910 million, respectively.

Institutional Inflows Boost Network Security

The rising hashrate and improved network security are particularly important as institutional investors pour capital into Bitcoin exchange-traded funds (ETFs) and other regulated cryptocurrency investment vehicles. In November, Bitcoin ETFs broke the $100 billion mark in net assets for the first time, according to data from Bloomberg Intelligence.

Institutional Participation

Asset manager Sygnum expects this trend to accelerate in 2025 as large institutional investors, including sovereign wealth funds, endowments, and pension funds, add Bitcoin allocations. With improving US regulatory clarity and the potential for Bitcoin to be recognized as a central bank reserve asset, 2025 could mark a significant acceleration of institutional participation in crypto assets.

Conclusion

Bitcoin’s hashrate reaching a new all-time high is a testament to the network’s growing strength and resilience. As institutional investors continue to pour capital into regulated cryptocurrency investment vehicles, it is clear that Bitcoin’s future looks increasingly promising. With improved network security and increasing institutional participation, Bitcoin’s price is likely to remain robust in the long term.

References

CoinWarz: Bitcoin’s Hashrate Reaches New All-Time High of Over 1,000 EH/s
JPMorgan Research Note (December 10th): Miners’ Strategies to Overcome Halving Headwinds
BitcoinTreasuries.NET: Mining Companies’ BTC Holdings
Bloomberg Intelligence: Bitcoin ETFs Break $100 Billion in Net Assets
Sygnum Statement: Institutional Participation in Crypto Assets