Bitcoin network fundamentals have remained unfazed by its spot price failing to show any crucial breakouts.
According to data from BTC.com, its mining difficulty has tapped a new high of 32.05 trillion hashes at a block height of 753,984 after an increase of 3.45%.
Bitcoin’s New Difficulty Adjustment
This is the fourth such increase since the drop in difficulty adjustment in the last week of July. The previous jump saw an uptick of 9.2%, from around 28.3 trillion hashes to 30.9 trillion hashes. This was the second-largest increase this year, behind 9.32% back in January.
Bitcoin hash rate also appeared to be copying difficulty in a fresh push for new record highs. The driving forces behind this could potentially be more rigs plugged in by large public miners. These entities have been eyeing expansion this year. Additionally, the easing of heatwaves in certain jurisdictions may also have contributed to more miners powering on their rigs.
Last month, Texas miners suspended operations to help the energy grid and conserve energy during a heatwave, This move was speculated to make cryptocurrency easier to mine. However, they switched back on a few weeks later.
The latest difficulty rise is now expected to pressurize miners’ profit margin if the price fails to rally. Currently, BTC struggles to remain above $20,000. This still strains major public miners to achieve profitability on each bitcoin mined. The last four months have already been tough for them as some had resorted to offloading their bitcoins in order to sustain themselves. In August, the net outflow was recorded to be around 21.3k BTC.
A decline in difficulty adjustment could mean that miners drop off the network due to rising costs and, in turn, jeopardize its security. On the flip side, an increase demonstrates a strong and growing network. With regulators becoming more stringent about climate affairs, sectors such as gas and hydro could potentially champion cheap energy costs, thereby enabling a new generation of long-term mining to surface.
Furthermore, Bitcoin mining consultancy firm Blocksbridge, in the latest edition of its “Miner Weekly,” stated that the current “bear market is really crashing those with inefficient mining fleets.”
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