What Impact Does the Decline in Ethereum Hashrate Have? (Ethereum, hashrate, price)

What impact does the decline in Ethereum hashrate have? What impact does the decline in Ethereum hashrate have?

The decline in Ethereum hashrate is mainly due to a decrease in miner income. According to Etherscan data, as of 17:43 on December 15, 2020, the number of blocks mined on the Ethereum network was 9,384, while Bitcoin generated over 30,000 transactions in one month. Although it is currently the most profitable application in the Ethereum network, the price of Ether has also fallen significantly.

According to Cointelegraph, in June of this year, Ethereum hashrate dropped sharply due to the emergence of DeFi protocols and the development of the Ethereum ecosystem. According to DuneAnalytics, as of July 30, 2021, Ethereum has produced approximately $400 million in cryptocurrencies. However, historical data shows a significant difference between Ethereum hashrate and market value. Ethereum mining pools were launched at the end of 2017 and experienced a bull market, but it did not start to recover until 2018. Since the beginning of 2020, nearly 3 million ETH have been staked. With the sharp drop in the price of Ethereum, the fees on Ethereum have gradually increased, leading many to believe it is a “bubble.”

In addition, some experts predict that Ethereum hashrate will continue to grow and rise in the next year.

Currently, there are approximately 900 projects under development on Ethereum. These include decentralized finance (DeFi) platform Synthetix and stablecoin issuer Uniswap. The number of active addresses on the Ethereum network has reached about 1 billion, allowing the network to process approximately $2 billion in daily transaction volume.

Since the second half of last year, ETH hashrate has been on the rise, but with significant volatility. The recent sudden decline in ETH hashrate has raised concerns about mining competition. According to data from Bitinfocharts.com, in the past 24 hours, newcomers worth about $278 million have entered the market, with these investors coming mainly from mainland China. The market share of the mining industry has also increased as a result of these new entrants. For example, in the end of the third quarter and the beginning of the fourth quarter of 2020, China’s hashrate accounted for over 60% of the global hashrate. At the same time, the average cost of Chinese mining machine manufacturers is slightly higher, equivalent to the power consumption of a TSMC every Thash calculation.

Ethereum Hashrate Price

Ethereum hashrate price trend chart

According to OKLink data, the 5 most recent 24-hour increase in Ethereum network hashrate is 11.8%. The highest value was reached on July 1st, with a low of $9.68; the current number is close to the peak set on December 30, 2019, which was about $47,700. With the launch of the Ethereum 2.0 beacon chain at block height 630,000 and the continuous increase in Ethereum network difficulty, mining profitability is gradually decreasing, and the price of Ethereum is also beginning to decline.