Bitcoin Hashrate Reaches All-Time High as Miner Reserves Decline to Lowest Level in 3 Years

The impact of the post-halving period on Bitcoin miners is becoming increasingly apparent, with onchain data revealing that miners’ bitcoin reserves have reached a three-year low.

According to data from CryptoQuant, reserves have dwindled to 1.8 million BTC as of August 12. The last time reserves were at this level was when bitcoin had just achieved a record high in 2021.

Despite surpassing that record and reaching an all-time high of nearly $73,750 in March, Bitcoin is currently trading approximately 18% lower following a period of volatility. The recent events, including the German government selling $2.9 billion worth of bitcoin and a surge in global risk-off sentiment leading to a significant bitcoin sell-off, have contributed to this decline. Typically, miners tend to hold onto their bitcoin until the price is substantially higher before converting it to fiat currency.

While miner reserves have hit a three-year low, the network’s hashrate has recently reached a new record high of 627 exahashes per second (EH/s). The hashrate serves as a metric for the computational power utilized to mine and process bitcoin transactions on the network. A higher hashrate signifies a more secure network due to increased competition among miners to validate transactions.

In a recent report by Unchained, it was noted that miner profitability had dropped to a six-month low, primarily driven by the surge in hashrate. Additionally, the “hash price,” representing the anticipated earnings for miners at the current hashrate, hit its lowest point in five years.

Bitcoin miner TeraWulf disclosed a 21% decrease in the amount of Bitcoin mined during the second quarter of 2024 compared to the same period in the previous year. This decline in mining output reflects the challenges faced by miners in the current market environment.