According to Glassnode, a blockchain intelligence provider, Bitcoin’s growing hash power is despite its bear market-level trading activities.
The company’s weekly On-chain analysis examined investor behavior during Bitcoin’s recent price slump. After briefly breaking above $45,000 resistance in late December, the cryptocurrency has now settled into its consolidation range of around $40,000.
Glassnode’s research revealed that some investors were profit-taking during recent rallies.
The report stated that ‘We have yet to see convincing influxs of new users or demand. The report stated that Bitcoin’s user base is still in the lower band of a six year bear market channel, and there is no evidence of any strong growth or recovery. This channel is usually broken only during bull markets, such as those in the late 2017 and early 2021.
Also, the transaction count is now at 225,000 per day. Although it is higher than in July, it still represents a significant drop from the bull market trend. Transaction fees have fallen to an all-time low of around $1,500 since May 2017, reflecting the lack of competition among Bitcoin traders for block space.
This would theoretically reduce incentives for mining Bitcoin as miners make less per block. Despite this, the industry is experiencing increased competition. The mining difficulty has reached an all-time high.
To solve each Bitcoin block, you will need 122.78 Zettahashes. Glassnode says that each Bitcoin block requires approximately 122.78 Zettahashes to solve.
Bitcoin miners use their computing power to try to solve the next block. They make a profit from newly minted Bitcoins and/or transaction fees. The majority of rewards for miners are currently composed by the 6.25-block reward. This likely explains why there has been no increase in on-chain activity.