Hashrate of Ethereum plummets by Over 10% as Mining Profitability Declines
As miner profitability has decreased, the Ethereum mining hashrate has decreased by over 10 percent over the last month, according to data.
According to a post on CryptoQuant by an expert, the falling ETH price and upcoming merging are pushing some miners to deactivate their rigs. Hashrate is a metric for measuring the overall processing power linked to the Ethereum network.
In general, greater values of the measure result in improved network performance. Additionally, the greater the decentralization of the hashrate, the greater the security of the blockchain.
When the value of this indicator increases, it indicates that miners are now attracted to the ETH network as they bring more computers online.
On the other side, the hashrate decreases when miners depart from the chain, most likely due to a decline in profitability. As seen in the above graph, the Ethereum mining hashrate has lately decreased to only 862 TH/s.
This is a decline of more than 10 percent compared to the previous month’s peak. The quant identifies a number of causes for this pattern. The first aspect is the clear decline in miner income caused by the recent price decline of cryptocurrency.
Miners pay their operating expenses in dollars, therefore the USD value of ETH, which has decreased about 40 percent over the last 30 days, is more meaningful to them.
The second factor is the rise in operational expenses. The ever-rising cost of power must have impacted miners as well.
Lastly, the approaching integration with the proof-of-stake (PoS) network implies that Ethereum miners have a limited amount of time to generate a return on investment.
These reasons have rendered mining unprofitable for some miners, and as the hashrate decline indicates, they are selling their rigs to recuperate their losses.
At the time of writing, the price of Ethereum is about $1,100, a 9 percent increase over the last week. In the previous month, the value of the cryptocurrency decreased by 40%. The graph below displays the price trend of the coin over the last five days.