Decentral Block Post

October witnessed a surge in Bitcoin’s hash rate, which is pushing the metric to a new high of 245 exahashes per second. These changes led to a sharp decrease in the hashprice, resulting in a drop in the profit margins for Bitcoin (BTC) miners and reaching a low of $66.8 per petahash on Oct. 24.

According to Luxor Technologies, “hashprice” is the revenue BTC miners earn per unit of hash rate, which is the total computational power deployed by miners processing transactions on a proof-of-work network.

Not only has volume been inconsistent, but the Bitcoin hash rate increased last week to an average of 269 EH/s. This means that the network’s difficulty has been rising since July 2022.

The expansion of mining operations, which creates miner competitiveness; the increased use of ASIC miners, which are more efficient than their alternatives; and the Ethereum Merge have led some Ethereum mining firms to fill empty rack space from non-operating Ether (ETH) GPU miners with BTC-specific ASIC miners.

Consequently, the surge in the hash rate resulted in an adjustment of the Bitcoin difficulty at a time when BTC’s price was dropping. As expected, after the hash rate spike and difficult increase, the hashprice plummeted to $0.0657 per terahash per day, thereby reducing the level of profit.

Bitcoin (BTC) spiked above $20,000 on Oct. 25 as risk assets benefited from new U.S. dollar weakness.

Bitcoin taps three-week highs

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting highs of $20,191 on Bitstamp.

The move came in tandem with rising United States equities, these in turn buoyed by a declining U.S. dollar, which lost traction against major trading partner currencies on the day.

With that, Bitcoin saw its first trip above the $20,000 mark since Oct. 7.

“Finally, the volatility will kick in,” Michaël van de Poppe, founder and CEO of trading firm Eight, reacted.

The share of the Bitcoin (BTC) network controlled by publicly held mining companies 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.

Public Bitcoin miners’ hash rate jumps 295% in a year

The outlook appeared after assessing the hash rate performance of Core Scientific, Marathon Digital Holdings, Riot Blockchain and other public miners over the last 12 months. Notably, these firms increased their hashing capacity from 15 exahashes per second a year ago to 58 EH/s in October 2022 — a 295% increase.

In comparison, the hash rate of private miners increased from 134 EH/s to 177 EH/s in the same period — a 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 the author of the Hashrate Index report.

He added that public miners used 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.

Bitcoin (BTC) returned to local highs at the Oct. 25 Wall Street open as nervous analysts kept an eye on miners.

DXY provides instant relief for BTC

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD rising to offer a modest challenge to resistance, still unable to escape an established trading range.

United States equities likewise headed modestly higher, with the S&P 500 and Nasdaq Composite Index up 1% and 1.3%, respectively at the time of writing.

The U.S. dollar index (DXY) conversely lost ground on the day, falling to its lowest levels since Oct. 6 and providing potential tailwinds for risk assets to seal opportunistic gains.

For traders, the intraday status quo remained in place amid an ongoing lack of real volatility. Popular Twitter account Crypto Tony highlighted significant range levels, with $18,900 an important zone to hold.

Near Protocol’s in-house stablecoin, USN, recently became undercollateralized, forcing Near Foundation to recommend winding down USN to prevent a situation similar to the Terra (LUNA) and UST collapse. Supporting this move, the Near Foundation opened up a $40 million fund to protect investors and help them cash out of USN with equal amounts of wrapped Tether (USDT.e).

On Oct. 24, Near Foundation revealed setting up a $40 million fund, allowing eligible USN holders to redeem their USN tokens on a 1:1 basis with USDT.e. The program was launched after Decentral Bank (DCB), the issuer of NEAR-native stablecoin USN, raised concerns about the stablecoin depegging due to algorithmic failure.

The USN Protection Program aims to cover the collateral gap of $40 million, which the foundation confirmed was not linked to the NEAR token price. Taking proactive measures to protect investors from a possible collapse, Near stated:

“The NEAR Foundation is recommending that DCB wind down USN in an orderly manner. To assist with this process, the NEAR Foundation has provided a $40m USD grant to a subsidiary of Aurora Labs – one of the NEAR ecosystem’s most prominent contributors – to set up the USN Protection Programme.”

The grant was provided to an Aurora Labs subsidiary and was immediately made available for users to exchange their depegged stablecoin tokens. However, redemptions will begin only after DCB commences the winding down process.