Ethereum mining hash rate has reached a new all-time high (ATH) after fully recovering from China’s crackdown.
Ethereum mining hash rate makes new ATH
The ETH network hash rate set a new ATH record with an average daily hash rate of 715k GHz on Sunday.
Since Ethereum currently uses a Proof of Work (PoW) consensus mechanism, nodes require a lot of computing power to add transactions to the blockchain. Mining hash rate is the overall measure of this computing power on the network.
Here is a graph showing the trend in the metric’s value over the years:
The ETH mining hash rate makes a new ATH | Source: Etherscan
As the chart shows, prior to this current bullish trend, the Ethereum hash rate peaked on May 20 at around 643k/s. However, in June, the value of the scale dropped to only 477 thousand GHz / s.
Related reading | Digital scarcity: How Ethereum is beating Bitcoin at its own game
Why ETH Hash’s crash rate?
On June 8, the network hash rate was around 618 kHz/s. After only 16 days, the value fell to the previously mentioned low.
The reason behind the decline is China’s crackdown on mining. In May, the nation reiterated its stance on cryptocurrencies, leading to a market-wide price crash.
The state also began cracking down on mining hubs soon after, prompting miners to shut down their operations.
Since a large portion of the global hash rate is in China, the crackdown has led to a breakdown of the scale. A portion of the Ethereum miners have dumped their hardware on websites and gone out of business. Some listings on popular platforms had these miners selling RTX 3060 GPUs for as low as $270.
While other miners migrated to other countries. When they started moving and restarting processes, the hash rate started going up again.
Since ETH mining has been very profitable lately, it jumped more during the low hash rate, and now after recovering from the crackdown, it has surpassed the previous ATH metric.
Related reading | The main reasons for the sudden drop in the price of Bitcoin and Ethereum
Profitability was higher not only due to reduced competition due to fewer miners, but also due to upward price movements.
At the time of writing, the price of Ethereum is hovering around $3.2K, down 18% in the past seven days. Over the past month, the cryptocurrency has lost 2% of its value.
Below is a chart showing the trend in ETH price over the past 3 months:
ETH price continues its recent move down | Source: ETHUSD on TradingView
Over the past week, the value of Ethereum has fallen since it peaked just under $4k. It is not clear where the price might go next, but the current price action looks bearish at least in the short term.
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