Bitcoin Hashrate Hits Record High While Miners Face Revenue Pressure from Low Fees

Bitcoin’s (BTC) hashrate has surged to a new all-time high, with the network’s seven-day moving average reaching 833 exahashes per second (EH/s), marking a 9% increase from 767 EH/s just days ago, according to Glassnode data.

Despite this surge in mining power, Bitcoin transaction fees have dropped to multi-year lows, even as BTC trades near $100,000. High-priority transactions in the Bitcoin mempool currently cost only 5 sat/vB ($0.69), significantly reducing miners’ earnings from fees.

A report from Miner Mag indicates that pre-orders for mining hardware have slowed following the pre-halving rush. Many large mining firms had expanded their operations in anticipation of Bitcoin’s April 2024 halving, which cut block rewards in half. Now, with the event behind them, analysts foresee a deceleration in hashrate growth.

Over the past 18 months, institutional investments have driven major expansions in mining infrastructure, fueling a steady rise in hashrate. Since the halving, network security has strengthened with a 40% increase in hashrate, but profitability for miners remains under pressure due to historically low fees.

Bitcoin’s long-term sustainability depends on transaction fees eventually replacing block subsidies as the primary revenue source for miners. However, with current market conditions, the low fees are making it increasingly difficult for miners to offset operational costs.

The next Bitcoin mining difficulty adjustment, set for four days from now, is projected to increase by over 6%, further raising the barrier for miners and adding new challenges to profitability.