Public Bitcoin miners' hash rate is booming — but is it actually bearish for BTC price?
The public miners' share of the Bitcoin (BTC) network could grow to 40% by mid-2023, according to a new report by Hashrate Index. But this could bring more stress to an already bearish BTC market.
The outlook appeared after assessing the hash rate performance of Core Scientific, Marathon Digital Holdings, Riot Blockchain, and other public miners in the last 12 months. Notably, these firms increased their hashing capacity to 58 EH/s in October 2022 from 15 EH/s a year ago — up 295%.
In comparison, the private miners' Bitcoin hashrate increased from 134 EH/s to 177 EH/s in the same period — 58% growth.
"The driving force for the public miners' rapid capacity increases is that they could access cheap capital during the bull market of 2021," explained Jaran Mellerud, a Bitcoin mining analyst and author of the Hashrate Index report.
He adds that public miners employed the money to purchase massive mining rigs. As a result, these firms have tens of thousands of Bitcoin mining rigs in storage, waiting to be plugged in, while awaiting deliveries of more rigs.
Core Scientific - the biggest public #bitcoin miner - has a 5% share of the total hashrate. Marathon and Riot follow behind, each controlling over 2% of Bitcoin's hashrate.In total, there are seven public bitcoin miners with a hashrate share of more than 1%. pic.twitter.com/ZnwsFjvQcy
Thus, the Bitcoin hash rate generated by public miners could continue to increase substantially as more and more new machines come online.
On the other hand, private miners couldn't access the capital to purchase mining rigs. So their hash rate contribution growth may remain slower by comparison, argues Mellerud.
But in 2022, Bitcoin miners in general have been battered by declining BTC prices,
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