Unexpected Increase in Ethereum Hash Rate

At Ethereum, we have witnessed an expanding network service throughout the year 2020. Blockchain has  seen an increased influx of stablecoins and funds into various ETK-based DeFi initiatives. At the same time, the Ethereum hash rate recorded steady growth in 2020.

With this growth that Ethereum has seen in the last five months, more investors have started to realize its potential and therefore allowed ETH to see an increase in demand. This also coincided with a large increase in the
cryptocurrency’s hash rate, which has climbed just under 27 percent since the beginning of the year.

From a price perspective, we can say that Ethereum has done very little to excite the investor over the past year. Although a parabolic rally was seen in February, this rise was short-lived and was followed by an intense decline that descended to lower levels from the zone below $100.

But this has done little to curb network development over the past few months . According to data from analytics platform Glassnode, ETH’s hash rate increased by close to 27 percent during the year. This is the highest level seen in seven months.

Aside from that, it’s worth remembering that the cryptocurrency’s current hash rate of 166 th/s is still significantly lower than the all-time high of 250 th/s set in August of 2018.

As cryptocurrency research platform CryptoSlate reported in late May, analysts cite Ethereum’s growing utility as the primary driver driving its core strengths, and it also influences investor demand for the cryptocurrency.

Renowned investors consider there to be a growing link between the utility of Ethereum and the demand for ETH. ETH miners have received $3.5 million in rewards in the last 30 days. In the chart below, we see that the demand for block space is mostly driven by stablecoins and DeFi,  which account for the vast majority of the fees paid to miners .

However, it is important for investors to consider the effects of increased utility and power on Ethereum’s price action ultimately. However, both of these factors seem to be positive for ETH’s medium-term outlook.