Bitcoin’s hashrate is at an all-time high.
Bitcoin Hashrate – The total computing power of the Bitcoin network reached over 1,000 exahashes per second (EH/s) on January 3, according to data from CoinWarz.
This is almost double the network hashrate of 12 months ago. According to CoinWarz, Bitcoin's hashrate will hover around 510 EH/s by January 2024. At the time of this article's publication, Bitcoin's hashrate has returned to about 780 EH/s.
The network's growing capacity indicates that Bitcoin miners are devoting more computing resources to the blockchain, thereby improving the network's security.
Miners continue to expand production even after Bitcoin (BTC) dropped from 6.25 BTC to 3.125 BTC in April.
Source: CoinWarz
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Overcoming head wind
In the year In 2024, Bitcoin's strong performance will offset some of the headwinds, especially for cash-heavy mining companies like Riot Platform and CleanSpark.
Mining companies have been “acquiring other miners to increase their recent hashrate and power lines,” JPMorgan said in a Dec. 10 research note shared with Cointelegraph.
Miners also prioritized accumulating BTC on their balance sheet. In December, JPMorgan raised price targets for four Bitcoin mining stocks to reflect the value of miners' electricity assets and BTC holdings.
JPMorgan cited the performance of shares of software company MicroStrategy, which has traded at roughly a 2.4x multiple of its BTC treasury since Dec. 10.
Bitcoin miners including Marathon, Riot and CleanSpark hold roughly $4.4 billion, $1.7 billion and $910 million worth of BTC treasuries, respectively, according to data service BitcoinTreasuries.net.
Source: Bitcointreasuries.net
Institutional income
Bitcoin's increasing hashrate — and improving network security — is especially important as institutional investors pour capital into BTC exchange-traded funds and other regulated cryptocurrency investment vehicles.
In November, the Bitcoin ETF broke $100 billion in net assets for the first time, according to data from Bloomberg Intelligence.
Asset manager Sygnum expects large institutional investors, including sovereign wealth funds, endowments and pension funds, to increase their Bitcoin allocations by 2025.
“With improving US regulatory transparency and Bitcoin's potential as a central bank reserve asset, 2025 could be a sign of a downward acceleration in institutional participation in crypto assets,” Martin Berger, Sygnum's chief customer officer, said in a statement.
Magazine: How crypto laws are changing around the world in 2025.
