The blockchain surveillance firm Chainalysis published a research report that shows that BTC spending has significantly dropped in the last month. The researchers say the global pandemic, economic crisis, and crypto market flash crash had an adverse effect on crypto spending habits, even though many people are stuck at home due to lockdowns and quarantines.
The number of confirmed transactions per day fell from 350K to as low as 210K during the price dip, but has since recovered to more than 270K daily transactions. Additionally, Bitcoin’s hashrate has started to recover after its significant drop from 123 million TH/s to 94 million TH/s, caused by miners turning off old hardware. This happened because Bitcoin mining profitability fell with the market crash.
Some experts worry that if the BTC price doesn’t recover quickly, more miners will turn off their hardware because of the block mining reward halving in May. A very low profitability could consolidate hashrate into the hands of a small group of privileged miners who have access to cheap energy. That could make the network vulnerable to an attack from a well-funded adversary, such as a hostile nation-state.
Reminder: the Bitcoin’s block mining reward halves every four years. The block reward will decrease from 12.5 to 6.25 BTC per block in May. Historically, previous halvings preceded bull-runs.