How Do Changes in Mining Profitability Influence the Network Hash Rate?

Mining profitability is a primary driver of the network hash rate. When profitability increases, typically due to a rise in the cryptocurrency's price or a decrease in energy costs, more miners are incentivized to join the network, which increases the total hash rate.

Conversely, if profitability falls, less efficient miners may shut down their operations to avoid losses. This exodus of miners leads to a decrease in the overall network hash rate, which in turn would trigger a downward difficulty adjustment.