Bitcoin Mining Difficulty Hits New High of 110.45T amid Sell-off

by

The Bitcoin network, represented by BTC and currently valued at approximately $91,020, has experienced significant advancements following Donald Trump’s presidential election win in November 2024. One such evolution revolves around the intricate process of Bitcoin mining, which recently reached an unprecedented historical high of 110 trillion difficulty level. Moreover, within the past 24 hours, it has demonstrated a volatility rate of 3.8%, boasting a market capitalization of $1.81 trillion and trading volumes totaling $47.36 billion.

It’s evident that Bitcoin miners have been extremely busy lately. On Sunday, January 12th, the difficulty of mining Bitcoin increased by 0.61%, reaching an unprecedented peak of 110.45 trillion at block height 878,976.

Data Insights into Bitcoin Mining Difficulty

As the challenge of mining Bitcoins heightens due to an increase in difficulty, miners are under greater strain to stay profitable. With this growing need for computational power, operating costs will inevitably rise. Post the Bitcoin halving event scheduled for April 2024 and a 50% reduction in mining rewards, some miners with outdated machinery have found it necessary to withdraw from the business.

Following the halving event, smaller miners began to withdraw from the network, resulting in a 15% decrease in hash rate. It’s significant that Bitcoin’s difficulty has recently increased by 0.61%, enhancing its security and maintaining its decentralized essence. With more miners now vying for rewards, the network becomes stronger and less susceptible to assaults.

Significantly, this modification indicates that the Bitcoin network is thriving, with an increase in resources dedicated to mining. In approximately two weeks, experts predict a rise of around 0.76% in mining difficulty. If their predictions hold true, the Bitcoin mining difficulty will escalate to approximately 111.29 trillion.

It’s fascinating to note that this change indicates an increase in the number of people looking to mine Bitcoin and a rise in investment in mining equipment. Notably, the Bitcoin mining difficulty reached approximately 101.65 trillion in November 2024, following the 23rd adjustment of the year. This surge suggests growing interest and investment in Bitcoin mining.

Current Bitcoin Outlook

Significantly, Bitcoin’s price stays near the $91,000 level, despite a prolonged drop, as indicated by a 3.33% decline over the past day, according to CoinMarketCap data. However, the continued downward trend, the coin has been experiencing, might be offset by the robust expansion of its key network metrics, which could potentially draw in future investors due to its overall health.

The network’s computational strength, or its hashrate, has soared to unprecedented levels. Over a rolling seven-day period, the Bitcoin hashrate is roughly 920 quintillion hashes per second (EH/s).

As an analyst, I can say that a higher hashrate typically strengthens network security, yet it also amplifies the challenges of mining due to increased complexity. This situation leads to enhanced operational requirements for mining firms. Therefore, Bitcoin miners may find themselves compelled to upgrade their equipment to more sophisticated and energy-efficient models in order to retain their competitive edge.

Bitcoin’s bullish phases often correlate with growing miner income, as indicated by Glassnode data from 2024. The total dollar mining revenue, measured using a 7-day moving average (7DMA), surpassed $35 million. This represents an uptick of more than $10 million compared to the lows seen in September 2024.

Nevertheless, following the halving in April, Bitcoin mining revenue has consistently fallen below its 365-day simple moving average (SMA), around $40 million. Typically, when miner revenue exceeds this 365-day SMA, it could signal an upcoming Bitcoin bull market.

Read More

2025-01-13 16:54