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Analysts Keep Reduced Hashrate Estimate for Bitcoin Despite Growth Exceeding Model

Bitcoin Fees Forecast

Mining

Last updated:

June 26, 2023 06:54 EDT

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Fredrik Vold

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Fredrik Vold

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Last updated:

June 26, 2023 06:54 EDT

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A new report from the crypto-focused financial services firm BitOoda has reiterated a reduced hashrate projection for the Bitcoin (BTC) network for 2022, despite hashrate growth so far this year being stronger than expected.

According to the firm, the Bitcoin network’s hashrate is expected to reach 327 EH/s by the end of the year. The estimate is the same as the one firm predicted in a report from January, but still represents a reduction from the 334 EH/s it had predicted last year.

The year-end hashrate for 2021 came in at 174 EH/s. The target for 2022 thus represents a 22% year-on-year growth rate, BitOoda said.

As of Monday this week, the 7-day average of the Bitcoin network’s hashrate stood at 189.84 EH/s, data from BitInfoCharts shows.

7-day moving average. Source: bitinfocharts.com

Meanwhile, the report said that growth in hashrate so far this year has “exceeded our model projections.” It also shared a chart that showed how the hashrate since January has stayed above the latest estimate from January 6 this year.

Notably, BitOoda’s report pointed to the much-discussed chip shortage as the main limiting factor for hashrate growth.

“We expect power infrastructure to be the gating factor in mining expansion earlier in the year, but to start easing later in the year, with semiconductor availability the ultimate limiting issue,” the report said.

The report lastly discussed transaction fees, saying that the current fee level on the Bitcoin blockchain is below prior estimates.

The possible reasons for this, according to BitOoda, includes that exchanges are settling more transactions between themselves in stablecoins rather than in BTC, that more BTC is held on exchanges versus in separate wallets, and that Bitcoin’s Lightning Network has seen increased adoption.

Combined, this means that “there may be downside risk to our [transaction] Fee projections,” BitOoda said.