Ethereum Milestone: Mining Hash Rate Sets New All-Time-High

The Ethereum mining hash rate has reached a new all-time-high (ATH) value after completely recovering from China’s crackdowns.

Ethereum Mining Hash Rate Makes New ATH

The ETH network hash rate has made a new ATH record as the average daily hash rate reached 715k GH/s on Sunday.

As Ethereum currently uses a Proof of Work (PoW) consensus mechanism, nodes require a lot of computing power to add transactions to the blockchain. The mining “hash rate” is the total measure of this computing power on the network.

Here is a chart showing the trend in the value of the metric over the years:

The ETH mining hash rate makes a new ATH | Source: Etherscan

As the graph shows, before this current uptrend, Ethereum’s hash rate peaked on 20 May at about 643k GH/s. However, in June, the metric’s value crashed down to just 477k GH/s.

Related Reading | Digital Scarcity: How Ethereum is Beating Bitcoin At Its Own Game

Why Did The ETH Hash Rate Crash?

On 8 June, the network hash rate was around 618k GH/s. Only 16 days later, the value had dropped down to the bottom mentioned before.

The reason behind the dip is China’s crackdowns on mining. In May, the nation reiterated its stance on cryptocurrencies, leading to a market-wide price crash.

The country also started cracking down on mining hubs shortly after, driving miners to shutdown their operations.

As a good part of the world’s hash rate resided in China, the crackdowns lead to a crash in the metric. A part of the Ethereum miners offloaded their equipment on online websites and exited the business. Some listings on popular platforms had these miners selling RTX 3060 GPUs for as low as $270.

While other miners migrated to other nations. As they started relocating and restarting operations, the hash rate started moving up again.

Since ETH mining has been quite profitable recently, more jumped in during the period of low hash rate, and now after recovery from the crackdowns, the metric has surpassed its previous ATH.

Related Reading | Major Reasons For Bitcoin And Ethereum’s Sudden Decline In Price

The profitability has been higher not only due to lower competition because of fewer miners, but also because of the price movements up.

At the time of writing, Ethereum’s price floats around $3.2k, down 18% in the last 7 days. Over the past month, the cryptocurrency has lost 2% in value.

Here is a chart showing the trend in the price of ETH over the last three months:

ETH price continues its recent move down | Source: ETHUSD on TradingView

Over the past week, Ethereum’s value has been sliding down since peaking just below $4k. It’s unclear where the price might head next, but current price action looks bearish at least in the short term.