Bitcoin miners have likely reactivated their older crypto-mining machines in the first quarter, leading to 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 encouraged miners who were previously unprofitable at lower hash price levels 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, reaching $66,280 at the time of publication. The reactivation of these older Bitcoin miners may have contributed to a 14.7% increase in the Bitcoin hash rate since the beginning of 2024. Additionally, the deployment of the latest-generation mining equipment, such as Bitmain S21s, has also played a role in driving the growth of the Bitcoin hash rate in the first quarter.
Bitcoin’s hash rate reached a peak of 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. Three days later, Bitcoin set a new all-time high of $73,738, according to CoinGecko.
Interestingly, despite a steady decline in transaction fees since the start of March, miner revenues reached a new all-time high on March 10, as noted by Smid. While old miners are being reactivated, the cost of application-specific integrated circuit (ASIC) machines is stabilizing, as many Bitcoin miners are holding off on new investments due to the upcoming halving event. Smid cited an ASIC Jungle survey which found that 65% of customers are postponing the purchase of new miners until after the halving.
The Bitcoin halving is scheduled for April 20, when block 840,000 is reached. This event will reduce miner rewards from 6.25 BTC ($414,000) to 3.125 BTC ($212,000) at current prices.