As hashrates rise, are Bitcoin miners back in business?

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So far, 2023 has turned out to be in favor of the bulls, with the price of Bitcoin (BTC) rising by more than 40%. But after a disastrous 2022, Bitcoin miners should finally start to come back online.

According to data from TradingView, BTC hit a local low at around $16,500 on January 1 and hit a high of $23,300 on January 23.

BTCUSD, Coinbase. Source: Trading View

The increase in the price of Bitcoin also leads to an increase in the profitability of Bitcoin miners.

Bitcoin Hashrate up slightly

The Bitcoin hashrate has been trending higher since the 2022 lows. According to data from CoinWarz, the latest BTC hashrate is 272.94 EH/s. This year, it recorded a new record of 296.8 PE/s on January 16.

Source: CoinWarz

The hashrate indicates the computing power of a blockchain network. It increases when more computers join a blockchain network to process hashes.

Thus, an increase in hashrate indicates that more Bitcoin miners are participating in transaction validation and network security.

Jaran Mellerud, an analyst at Hashrate Index, told the Financial Times, Sentiment among miners is better than it’s been in a long time. For many players facing bankruptcy, the sudden rise in the price of bitcoin is a lifeline.

Major mining companies fell during the crypto winter

The last months of 2022 were a huge challenge for mining companies when the collapse of FTX triggered an extreme crypto winter. One of the biggest crypto mining companies, Core Scientific, filed for Chapter 11 bankruptcy in December.

Other mining companies such as Riot Blockchain, Marathon Digital Holdings Inc. and Hut 8 Mining Corp revealed year-over-year revenue declines and huge losses.

However, the shares of these Bitcoin mining companies gave investors double-digit gains in 2023 with the rise in the price of BTC.

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For the latest Bitcoin (BTC) analysis from BeInCryptos, click here

Disclaimer

BeInCrypto has reached out to a company or individual involved in the story for an official statement on recent developments, but has yet to receive a response.

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