Bitcoin hash rate reached record high in May.
- The activity on the Bitcoin network increased for the fifth consecutive month.
- The mining difficulty and transaction fees also increased in May.
- Last month, the world’s largest cryptocurrency lost around 8.0%.
Despite the macro uncertainty that caused Bitcoin to lose approximately 8.0% last month, the network activity remained strong.
JPMorgan analyst expects a slowdown in hash rate
In May, the daily network hash rate, which is an important metric that indicates the health of the network, reached a record high. It marked the fifth consecutive month of increase for this indicator.
In simpler terms, the higher the hash rate, the more secure the network is. However, according to Reginald Smith, a JPMorgan analyst, in a note on Friday:
Our sense is that network hash rate growth could slow over the coming months (possibly lagging BTC price appreciation) as funding available rack space is hard to come by.
In terms of market capitalization, the 13 U.S. listed miners that JPMorgan tracks noted a 5.0% aggregate increase last month, reaching $6.7 billion.
Mining difficulty and transaction fee also increased
The mining difficulty, another metric that typically moves in tandem with the Bitcoin hash rate, also reached a record high in May.
Recent data confirmed that the crypto transaction fee increased last month as well. JPMorgan’s Smith also said in his research note:
Transaction fees spiked to over 5 Bitcoin per block mined in early May, which should drive modest C2Q23 earnings upside for the industry at large.
In recent weeks, however, Bitcoin transaction fees have returned close to its historic average of about 0.5 BTC per block mined. Last week, JPMorgan said Bitcoin should be trading at $45,000.