Bitcoin mining difficulty soars, hash rate also rebounds
As the crypto community eagerly awaits the SEC's decision, the interrelated dynamics between Bitcoin mining difficulty, hash rate, and price action are once again in the spotlight.
Bitcoin miners, especially those with low-powered mining equipment, will not be impressed by the recent rise in mining difficulty. This is after data from TheBlock on Thursday revealed that Bitcoin mining activity increased by 1.5% to a record high of $84.4 trillion.
Bitcoin mining difficulty hits a new high amid market optimism
Mining difficulty is a measure of how hard it is to mine a new block versus how easy it is to mine a new block. Bitcoin mining difficulty usually rises when the number of miners increases because there is more competition to find new blocks. On the other hand, if the number of miners decreases, the difficulty will also decrease, meaning miners can discover new blocks more easily.
However, the recent rise in mining difficulty follows a notable rise in the network’s 7-day moving average hash rate, which has just climbed back above 600 exahash per second (EH/s).
Recall that Bitcoin mining difficulty recently saw its biggest drop since December 2022. That was on May 9, when the metric fell by 5.9%, a direct consequence of the April 20 halving event. While the drop meant that miner subsidy rewards also decreased, a temporary spike in transaction fees, linked to the hype around Bitcoin Runes, initially mitigated the effects of this decline.
Since the adjustment, Bitcoin hashrate has been hovering between 580-590 EH/s. However, heightened optimism surrounding the approval of a spot Ethereum (ETH) exchange-traded fund (ETF) in the United States has sparked an industry-wide price rally. This optimism has now taken Bitcoin’s hashrate to around 606 EH/s.
Hash price recovery suggests improved revenue prospects for miners
As if to balance out with the difficulty adjustment, Bitcoin’s hashrate has seen a slight but noteworthy recovery. After falling to an all-time low of less than $50 per petahash per day (PH/s) on April 29, the hash price rebounded to $55 per petahash per day (PH/s) at the start of this week. The hash price is a widely used metric to calculate miners’ revenue potential.
As the cryptocurrency community eagerly awaits the SEC’s decision, the interrelationship between Bitcoin mining difficulty, hash rate, and price action has once again come into focus. The latest developments show that the impact of regulatory uncertainty can be felt across the industry and beyond. These speculations not only affect investor sentiment, but also operational metrics such as mining difficulty and hash rate.
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