Bitcoin Mining Difficulty Hits New Peak Just Before US Election Results

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As a seasoned crypto investor with over a decade of experience navigating market fluctuations and geopolitical events, I find myself cautiously optimistic about the current state of Bitcoin. The recent surge in mining difficulty and hashrate, coupled with the all-time high it reached, is a clear sign that the network is thriving. However, as we approach the US elections, uncertainty looms large.

As the U.S. election results are expected on November 5th, some intriguing advancements are taking place within the Bitcoin network. Notably, the BTC mining difficulty has reached an unprecedented all-time high, exceeding 100 trillion for the first time today.

It’s evident that Bitcoin mining is experiencing an unprecedented level of activity, as indicated by the recent surge in mining difficulty. Specifically, on Tuesday, November 5, the mining difficulty jumped by 6.24%, reaching an all-time high of 101.65 trillion at block height 868,896. This increase took place during the 23rd adjustment for this year 2024, leading to a total increase in difficulty by a significant 40% so far this year.

After witnessing the spike in Bitcoin’s price and value, it’s important to note that its hashrate, representing the network’s total computational power, has scaled new peaks. Over a seven-day moving average, Bitcoin’s hashrate is now roughly 730 exahashes per second (EH/s).

Increased hash rate tends to strengthen the network’s security, yet it simultaneously makes mining harder, leading to higher operational requirements for mining operations. As a result, Bitcoin miners often need to purchase sophisticated and energy-efficient machinery to remain profitable and stay ahead in the competition.

Based on the Q3 report from CoinShares, it’s been estimated that the average cost for mining one Bitcoin through public firms now stands at approximately $49,500. Interestingly, even though Bitcoin’s market value is roughly $69,000, numerous miners are still managing to turn a profit given the current conditions.

Bitcoin Price Action and US Elections

The Bitcoin price hasn’t shown any movement in the last two hours and is flirting around the $69,000 level as investors wait on the sidelines for the final outcome of the US Election. As per the prediction market data from Polymarket, Doland Trump has a 60% odds of winning.

According to a November 5th market analysis report labeled “Calm Before the Storm?”, the experts at Bitfinex observed that the implied volatility for Bitcoin options is presently around 40, suggesting a lack of strong conviction among traders about significant price fluctuations.

Bitfinex analysts noted that while there’s usually more market turbulence around U.S. election days like the one on November 5th, many traders are choosing to be cautious and observe rather than act immediately.

Conversely, the data from Coinglass indicates a substantial decrease in Bitcoin’s open interest. This suggests that traders are liquidating both their long and short positions in large quantities.

On November 4th, Keith Alan, one of the co-founders of trading platform Material Indicators, expressed his perspective on the upcoming US presidential election. He forecasted that for approximately two months, Bitcoin’s price movements might be subdued due to the election. Furthermore, he predicted that by 2025, Bitcoin would bounce back and rise above its overall trendline.

The reversal point at $69,000 no longer holds true

— Keith Alan (@KAProductions) November 4, 2024

Alan anticipates that a Trump victory might prompt an immediate response in BTC/USD, whereas a Democratic win would probably lead to the opposite outcome. In essence, he suggested that Bitcoin may not hit a fresh record high before the election results are announced, as one of his main “predictions” or assumptions about Bitcoin’s short-term price fluctuations.

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2024-11-05 17:45