The jump in the Bitcoin mining difficulty suggests that BTC miners have been getting back into action after the strong summer when miner activity had considerably dropped.
In one of the biggest difficulty adjustments since January 2022, the Bitcoin mining difficulty jumped 9.26% in the latest update. BTC.com published the latest data regarding the same.
The Bitcoin mining difficulty adjustment happens every two weeks and is the third positive one in a series. Since August 18, the Bitcoin network hashrate has also increased by 12%.
The Bitcoin mining difficulty refers to the complexity to crack the mathematical algorithm and add a new block to the Bitcoin blockchain. At this point, miners are repeatedly trying to find a hash below a set level. Miners who “discover” the hash are rewarded for the next transaction block.
Bitcoin and the broader crypto market entered a severe correction earlier this year. As a result. Miners had to sell their BTC in order to cover operation costs. Also, with the strong summer, several miners particularly in Texas decided to turn off their rigs in response to the strong power demand due to extreme heat. As a result of this, mining difficulty had fallen significantly during this period. In order to sync in with the network hashrate, the difficulty adjustment happens every 2,016 blocks (roughly every two weeks).
Kevin Zhang, senior vice president of mining strategy at Foundry said:
“The growth in hash rate is due to “a combination of heat waves finally subsiding (on a global level) and facilities slowly coming online. There’s also the added kicker of the higher efficiency Bitmain S19 XP’s finally hitting the market as well!”
Bitcoin Miner Selling Continues
Bitcoin miners have continued to sell during the recent price uptick in early August. Within a period of two weeks, Bitcoin miners sold off close to 6,000 Bitcoins.
Since July 2022, Bitcoin miners have come under pressure from falling token prices and rising energy costs. The selling pressure from Bitcoin miners continues as their overall margins across the industry have declined to 50% from the 80% peaks. However, some Bitcoin miners continue to remain optimistic about the future of Bitcoin mining.
Since the Bitcoin price has come under pressure, small-scale miners have been forced to get out of the game. On the other hand, large scale miners have been increasing their market footprint by adding more mining machines to their arsenal.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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