Bitcoin mining difficulty increased 14.95%, raising the level to the fourth most difficult in history
Bitcoin’s latest mining difficulty adjustment is the largest in more than two years, as the level increased 14.95% to 15.78T. The upward adjustment comes after the Bitcoin network has undergone consecutive downward adjustments since its third halving on May 11. The last time the network experienced this jump in the mining difficulty level was in January 2018, after Bitcoin rose to its highest price in December 2017.
In January 2018, Bitcoin’s network difficulty increased 16.84%. The increase to 15.78T approaches the difficulty of reaching 16T, which was only reached twice in 2020: in March and early May, in preparation for halving.
Fig 1: 15.78T is the seventh largest Bitcoin brand in positive difficulty adjustment since 2017 and the highest level since January 2018. Source: Glassnode
The increase means that miners now face a level of difficulty for the next two weeks, which is the fourth most difficult since the launch of Bitcoin in 2009.
This week’s adjustment shows more miners returning to the network, increasing the network hashrate after a decline in the weeks after halving. With the block’s rewards cut from 12.5 Bitcoins to 6.25 Bitcoins, some miners shut down their machines, with hashrate falling alongside the difficulty.
However, Bitcoin’s hashrate has gradually increased and has risen by around 8% in the past seven days. The 14-day moving average has risen consecutively since the last adjustments on May 20 and June 4.
Fig 2: Bitcoin hashrate. Source: Bitinfocharts
The return of miners with old or inefficient platforms and the launch of new ASICs by Chinese companies have increased hash power from 98 terahashes (TH / s) to 113 exahashes per second (EH / s).
Miners now need 1 TH / s to generate 0.000008 Bitcoin in one day, worth $ 0.08, following current prices. The leap in the difficulty setting is therefore set to reduce miners’ profit margins, and if more efficient machines, like the Antminer S19 developed by Bitmain, flood the market, less efficient miners will have to shut down if they are no longer profitable. .
Recently the FTX cryptocurrency derivative platform launched a futures contract that allows investors to bet against the difficulty of Bitcoin. To date, the exchange’s Q3 and Q4 contracts are at $ 17.3, which means traders expect Bitcoin’s hashrate and mining difficulty to rise in the next two quarters.