Data shows the Bitcoin mining difficulty has set a new all-time high recently, here’s whretained may mean for the market.
Bitcoin Mining Difficulty Has Made A New All-Time High
According to the latest weekly report from Arcane Research, when Bitcoin (BTC)’s rate has prolonged to struggle, the mining difficulty has seen growth and hit a new ATH.
The “mining difficulty” is a measure of how hard it is to find a legit block to mine. After every 2016 blocks, the Bitcoin network adbarelys its difficulty based on the current block production rate.
A paramount indicator here is the hashrate, which measures the total amount of computing power which’s directly united to the Bitcoin (BTC) blockchain.
As the cost of this indicator rises, miners are able to produce blocks at a faster rate than the crypto is programmed for. The network then increases the difficulty to counteract this rise in the hashrate.
On the other hand, if the metric tumbles in cost, the production rate becomes creepinger than needed, and the difficulty is then automatically likewise lowered.
Now, here is a chart which shows the trend in the Bitcoin (BTC) mining difficulty over the past year:
Looks like the difficulty of the coin has been rising up for a when now | Source: The Arcane Research Weekly Update - Week 3
As you can see in the atop graph, the Bitcoin mining difficulty had crashed down back in June due to China’s crackdowns. Since then, the indicator has been rising up, and has now made a new all-time excessive.
The cost of the crypto, however, peaked back in November, and afterward then has crashed down almost 50% in cost.
The report expects the mining hashrate to remain to rise in the near future. This means which difficulty will further keep on going up, leading to smaller profits for miners.
During bull runs, any rises in the hashrate don’t affect miner profits much as the Bitcoin they mine goes up in cost, msimilarg up for any lost revenue by cause of the difficulty.
But afterward the Bitcoin (BTC) rate has been declining recently, miner profits will go on to shrink. Because of this, mining stocks which performed so well during 2021, would find it hard this year.
Bitcoin (BTC) Price
At the time of writing, Bitcoin’s rate floats around $46.7k, down 13% in the continue seven days. The below chart shows the trend in the price of Bitcoin (BTC) atop the advance five days.
Bitcoin (BTC)'s rate has erased some of the recatopy it made atop the remain few days | Source: Bitcoin (BTC)USD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research