Bitcoin Hashrate Hits New All-Time High Amid Spot ETF Frenzy

Bitcoin’s hash rate, that is the network’s computing power, recently reached a new all-time high amidst the frenzy that came with the debut of spot Bitcoin ETFs in the US. According to data from IntoTheBlock, the Bitcoin hashrate reached an all-time high of 630.91 million TH/s or 630 EH/s on January 11, less than 24 hours after the U.S. Securities and Exchange Commission approved 11 Spot Bitcoin ETFs in the country.

Bitcoin’s hash rate hit a new all-time high yesterday https://t.co/bkdHCcEXFk pic.twitter.com/Mn3GxyDp6d

— IntoTheBlock (@intotheblock) January 12, 2024

The hashrate measures the total combined computational power used to mine new bitcoins and process transactions. The Bitcoin mining hashrate has been on a steady rise since 2021 irrespective of market sentiment, be it bullish or bearish, cementing Bitcoin as the most secure cryptocurrency network. Based on the information provided by Coinwarz, the hashrate started 2023 at 266 EH/s and ended the year at 598 EH/s, a 125% growth. 

The hashrate spiked further to an all-time high of 630 EH/s on January 11, and the timing was no coincidence. The surge in hashrate came right after the SEC approved the first US Bitcoin Spot ETFs to open the doors for mainstream investors to invest in the top crypto without actually owning the asset.

https://x.com/intotheblock/status/1745826801106956323?s=20 

Bitcoin’s hash rate hit a new all-time high yesterday https://t.co/bkdHCcEXFk pic.twitter.com/Mn3GxyDp6d

— IntoTheBlock (@intotheblock) January 12, 2024

As expected, the approval of these ETFs led to a frenzy of activities in Bitcoin, pushing its on-chain volume to its highest since the collapse of crypto exchange FTX. Consequently, the hashrate also increased, indicating miners are ramping up operations in anticipation of increased interest and trading volume that often follows the launch of new ETFs.

The approval of spot ETFs is a sign of mainstream acceptance that strengthens Bitcoin’s credibility. Despite the increase in trading volume and growth of the network, Bitcoin’s price seems to have deviated from this positive trend. The crypto’s price initially reacted positively to the approval of the spot ETFs, pushing it over $48,600, its highest point since April 2022. In a dramatic turn of events, this spike has since reversed, to give the notion of a “sell the news event.” 

At the time of writing, Bitcoin has retraced 11% from this local high and is trading just above $43,000. Trading volume has also fallen by 62% in the past 24 hours.

Bitcoin mining profitability, which saw steady growth in December has failed to react positively to the approval of spot ETFs. According to data from Hashrateindex, the drop in Bitcoin prices led to mining profitability falling to as low as $0.07958 per terahash/second per day on January 13th, a 22% decline from $0.10270 per terahash/second per day on January 1. 

Featured image from iStock