30 Aug 2022

Hashrate surging while on-chain activity remains low

Bitcoin on-chain activity stays low while the hashrate experiences a strong recovery.
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Last week, we noted the plummeting transaction fees, and over the past seven days, transaction fees declined further by 21%. This is the lowest seven-day average daily transaction fee since April 26th, 2020.
Source: Bytetree
The declining transaction fees are likely caused by huge growth in BTC’s block discovery rate, driven by a growing hashrate. On average, we saw 6.64 blocks per hour over the last seven days, well above the six blocks per hour target.
Tomorrow, the BTC network will see a massive positive difficulty adjustment. This will adjust the block discovery rate. The difficulty is estimated to increase by 7.2%, which would be the highest difficulty increase since January 21st. Following the difficulty adjustment, the block discovery rate and fees will likely grow as transactions compete to be included in fewer blocks.Nevertheless, while the difficulty adjustment might normalize the block discovery rate, the overall activity in bitcoin stays low. We saw a 3.78% decrease in transactions per day over the last seven days, suggesting that on-chain activity remains low.
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