Hash Rate Recovers as Bitcoin Miners Amass BTC Rewards
Current reports suggest that Bitcoin miners have now regained trust in the flagship cryptocurrency as they resume accumulating the asset after a long hiatus. Also, same reports reveal that centralized exchanges are recording a low inflow of Bitcoin since the past 50 days. Usually, when Bitcoin holders are transferring their holdings to exchanges, it means that confidence in the asset has reduced, which could then trigger a selling pressure.
Bitcoin miners are rewarded with a certain amount of Bitcoin upon confirming or verifying transactions on the network. According to the data provided by crypto analytics firms, Santiment and Glassnode, the Bitcoin wallets of these miners are growing again, unlike the past few weeks that saw a massive sell-off, following bans on mining operations by regulators. China set off the course for the bans. In view of that, most Bitcoin miners sold off some of their mining rewards they had been stockpiling since before June.
However, this month, they are retaining their rewards in anticipation of a BTC price peak in the coming months. Charts released by Glassnode indicate a gradual accumulation of these rewards. Miners are rewarded with about 12.5 BTC and the total 21 million supply of Bitcoin won’t be mined completely until 2140.
Exchanges Witness Low Inflow of Bitcoin As Investors’ Confidence Increase
Similarly, exchanges are witnessing a low inflow of Bitcoin holdings into custodial wallets controlled by them, pointing to a diminishing selling pressure on the asset. While that may seem like good news, experts anticipate a reinforced selling pressure as GBTC unlocking draws near. The unlocking is scheduled for July 19, and according to JPMorgan Chase market analysts, the price of Bitcoin may bottom out at $25k. It had only bottomed out at the $28k mark two weeks ago. Lately, it has been ranging between $33,000 and $35,000. The anticipated unlocking would probably be a litmus test for the confidence levels of Bitcoin enthusiasts.
Hash Rate Slowly Recovers; Still Below All-time High
Meanwhile, Bitcoin mining hash rate is gradually recovering after falling drastically in June. The decline was instigated by China’s regulatory heat that unsettled Bitcoin miners in the country and forced mining companies to migrate out of the country in droves. Since China contributes about 65% to the global mining hash rate, mining difficulty and hash rate sharply declined as miners stopped their operations there. Reports put the reduction in difficulty at 23%, the highest ever recorded.
The hash rate has not been restored to its former levels. It is now at 92.5 EH/s as against its all-time high of 171 EH/s before the ban in China. Perhaps a reversal by the Asian giant could make it reach the ATH or even surpass it. However, it is not likely that China would reverse the ban. China claims the ban is in line with its newly-formed anti-carbon policy. The hostility has also extended to crypto exchanges providing trading services and many have reasoned that China plans to create an unrivaled atmosphere for its CBDC since cryptocurrencies might be a serious contender.
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