Bitcoin hash rate drops but miners make record profits

Bitcoin hash rate could suffer a slump according to reports from experts. This is due to the impending end of the Sichuan rainy season. A large concentration of Bitcoin miners are located within this region in China and largely use hydropower to run their mining farms.

The miners tend to migrate to Sichuan during the rainy season and leave at the end of the rainy season. Experts believe that since the end of the rainy season last week, over 21 exa hashes per second of mining power has gone from the Bitcoin network.

This has been reflected in the seven-day average of Bitcoin’s hash rate which has dropped from 146.5EH/s to the current rate of 132.9 EH/s.  This trend is concurrent with previous years and suggests that Bitcoin miners are observing a normal trend.

With the end of the rainy season in Sichuan it is believed that many miners have begun to relocate to other provinces that would be experiencing rainy season including Xinjian and Inner Mongolia.

China is regarded as the Bitcoin mining region of the world with its cheap electricity and attractive government policies making it a destination for miners. Its influence has begun to wane in recent years as more mining farms are being built in other countries like Russia and Kazakhstan which have put up attractive policies for miners.

Bitcoin miners hit record profits

Despite the hash rates going down, Bitcoin miners have been able to cash-in on due to the recent bullish trend of Bitcoin.

Latest data from Glassnode, depicts miners sending their rewards to exchanges. The flow of capital from mining accounts to exchange peaked considerably in the past 24 hours with 12.823 BTC sent by miners as against the 3.137 BTC recorded yesterday.

📈 #Bitcoin $BTC Miners to Exchange Flow (2d MA) increased significantly in the last 24 hours.

Current value is 12.823 BTC (up 308.8% from 3.137 BTC)

View metric:https://t.co/8Bnl6PlAY8 pic.twitter.com/npj4qx4qoH

— glassnode alerts (@glassnodealerts) October 27, 2020

This is remarkable but not surprising given that the Bitcoin price recently hit a yearly height of over $13,000 and the market is largely bullish. Miners tend to transfer their rewards to exchanges during a pump and this is no different.

It will be interesting to see whether this current bullish pump is sustained as some analysts have predicted that Bitcoin could hit the $20,000 mark.