Within the last 24 hours, Bitcoin mining difficulty increased by 3.04% to hit an All-Time High (ATH). The rise in Bitcoin mining difficulty comes amid a sizable reduction in miners’ profits. As a result, crypto enthusiasts are now looking to see the long-term implications for Bitcoin’s (BTC) price.
Current State of Bitcoin Mining
According to CoinWarz, the Bitcoin mining difficulty was adjusted at block height 860,898, setting a record of 92.67 trillion. In the past seven days, it spiked by 3.58% and 2.21% in the last thirty days.
Bitcoin mining difficulty determines how difficult it will be to mine the next block. The difficulty adjusts every 2,016 blocks, roughly every two weeks. This helps in ensuring a new block is discovered every 10 minutes. This typically occurs regardless of how many miners are active.
The rise in difficulty follows a new record set by the Bitcoin hash rate. This metric measuring the network’s total computational power reached a new seven-day moving average ATH of 693.84 EH/s on Sunday.
Despite a rough time after the Bitcoin halving event in April, miners are collectively ramping up their hash rate. Bitcoin’s fourth halving event in April saw miners’ rewards slashed from 6.25 BTC to 3.125 BTC.
However, since bottoming out at a seven-day moving average of 550.25 EH/s on June 28, surviving operators have been upgrading their mining rigs and capacity. This has largely contributed to the surge in Bitcoin’s total hash rate.
Bitcoin Mining: Operator’s Disposition Amid Stagnant Price
While Bitcoin’s network difficulty and hash rate have surged, miner profitability has fallen. A recent research report from investment bank Jefferies noted that Bitcoin mining was much less profitable in August than in July. Within this period, the average Bitcoin price fell over 4%, and the average network hash rate rose about 2.7%.
As a result, the miner’s average daily revenue per exahash dropped by 11.8% from the previous month, according to the report. Investment banking giant JPMorgan disclosed in its last report that mining profitability fell to all-time lows in the first two weeks of August.
Jefferies analysts Jonathan Petersen and Joe Dickstein say September could be another difficult month for the Bitcoin miners. Their prediction is based on Bitcoin’s price, which is currently stagnant below $60,000, and the surge in the network hash rate.
Long-term Implication for Bitcoin Price
Still, there is a long-held notion that Bitcoin’s price directly correlates with mining difficulty. This notion is based on observation where the increase in Bitcoin mining difficulty corresponds to bullish cycles in the network.
If this trend continues this cycle, Bitcoin could soon be set on a bullish momentum. Moreover, a higher hash rate indicates a more secure network, which could further boost Bitcoin’s price.
As of this writing, Bitcoin price was trading for $57,600, which is up by 0.7% in the past 24 hours. The trading volume increased 18.4% in the past day to $37,336,760,658.
