Bitcoin Mining Difficulty Crashes 5% To Lowest Level In 3 Months, What Happens Next?
08 Luglio 2024 - 9:00PM
NEWSBTC
Recent data shows that the Bitcoin mining difficulty is on the
decline and has hit its lowest since May. This is significant
considering what this could mean for the Bitcoin ecosystem,
specifically Bitcoin’s price. Bitcoin Mining Difficulty Drops To
79.5 T Data from CoinWarz shows that Bitcoin mining difficulty has
dropped to 79.5 T at block 851,204 and hasn’t changed in the last
24 hours. This mining difficulty has continued to fall for a while,
with further data from CoinWarz showing that it is down 5% in the
last seven and 30 days. Related Reading: Finance CEO Raoul
Pal Says Crypto Will Reach $100 Trillion Market Cap – Here’s When
Bitcoin mining difficulty refers to how hard it is for miners to
mine a new block on the Bitcoin network. The difficulty usually
reduces when there is less computational power on the power and
increases when miners are mining faster than the block average time
of ten minutes. The recent drop in mining difficulty suggests that
more miners are leaving the Bitcoin network. This is most likely
due to the effects of the Bitcoin halving, which cut miners’
rewards in half. This has reduced the revenue from their mining
operations, with many miners struggling to stay afloat, especially
with increased competition. Bitcoin’s price action since the
halving has also not helped, as the drop in the flagship crypto’s
price has also affected their income. Bitcoin miner f2pool
recently highlighted the profitability of various categories of
miners at Bitcoin’s current price. The mining firm noted that only
ASICs with a Unit Power of 26 W/T or less can make a profit at
Bitcoin’s current price range. Crypto analyst James Van
Straten also recently highlighted how “weak and inefficient miners”
continue to be purged from the Bitcoin network. He claimed that the
recent drop in mining difficulty shows that miner capitulation is
closer to ending. Due to the low profitability that miners have
faced since the halving, some have had to offload a significant
amount of their Bitcoin reserves to meet operational costs, and
others have had to exit the Bitcoin ecosystem entirely. What
This Means For Bitcoin’s Price The decline in mining difficulty
suggests that miner capitulation might be ending soon, which is a
positive for Bitcoin’s price considering the selling pressure these
miners have put on it. Bitcoinist reported that Bitcoin miners sold
over 30,000 BTC ($2 billion) last month, which ultimately caused
the flagship crypto to experience significant price crashes.
Related Reading: Shiba Inu Sees Sharp 100% Decline In Whale
Activity, Is This Good Or Bad For Price? Crypto expert Willy Woo
also attributed Bitcoin’s tepid price action to these miners and
mentioned that the flagship crypto will only recover when the “weak
miners die and hash rate recovers.” He stated that Bitcoin would
have to shed weak hands for this to happen, with inefficient miners
going into bankruptcy while other mines are forced to buy more
efficient hardware. Featured image created with Dall.E, chart
from Tradingview.com
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