Bitcoin miners have likely reactivated their older crypto-mining machines in the first quarter, resulting in a record-breaking hash rate as Bitcoin’s price surged to a new all-time high in early March.
According to Nico Smid, founder of Digital Mining Solutions, improved market conditions have prompted miners who were previously unprofitable to come back online. The hash price level of Bitcoin has followed a similar trajectory to its price, which has increased by 56.8% in 2024 to $66,280.
The reactivation of older Bitcoin miners may have contributed to a 14.7% increase in the Bitcoin hash rate since the beginning of 2024. Additionally, the use of advanced mining equipment such as Bitmain S21s has also played a role in driving hash rate growth during the first three months.
Bitcoin’s hash rate reached its peak at 631 exahashes per second (EH/s) on a 7-day moving average on March 11, shortly after surpassing its previous all-time high price of $68,990. Subsequently, Bitcoin set a new all-time high of $73,738 on March 14.
Interestingly, despite a steady decline in transaction fees since the start of March, miner revenues reached a new all-time high on March 10.
While older miners are being reactivated, the cost of application-specific integrated circuit (ASIC) machines is stabilizing as many miners are delaying new investments due to the upcoming halving event. According to Smid, miners are adopting a “wait and see” approach, with a survey indicating that 65% of customers are postponing the purchase of new miners until after the halving.
The Bitcoin halving is scheduled for April 20, which will reduce miner rewards from 6.25 BTC ($414,000) to 3.125 BTC ($212,000) at current prices.
In conclusion, as Bitcoin’s price soared, miners have brought back their older machines, contributing to a surge in the hash rate. The use of advanced mining equipment has also played a role in this growth. However, miners are cautious as the halving event approaches, and the cost of ASIC machines stabilizes.