Bitcoin Mining Difficulty Hits 18-Month Low Amid Hash Rate Drop

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In an unforeseen turn of events, Bitcoin mining difficulty has significantly plummeted, marking the most considerable decrease observed in the past year and a half. This sudden shift is intrinsically linked to inconsistencies in the network’s hash rate, which has plunged below 600 EH/s, a fallout from the recent halving occurrence.

This recent adjustment, depicting a 5.7% shortfall, pulls down the level to about 83.1 trillion, based on information gleaned from Bitbo. Dating back to December 2022, this downward shift is the most poignant one observed and subtly mirrors comprehensive transformation within the landscape of Bitcoin mining. Back then, Bitcoin’s value hovered around a notable $17,000, a figure that starkly deviates from its current value.

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It’s compelling to note that the degree of mining difficulty, an important gauge that ascertains the quandary involved in unearthing a new block, undergoes an adjustment nearly every fortnight – or every 2016 blocks if you will. This system warrants a regularity in block discovery, ensuring a consistent pace of approximately every ten minutes, regardless of the size of the mining workforce.

The downfall in mining difficulty followed soon after a 10% plummet in the network’s hash rate – a drop from a week-long moving average of 639.58 EH/s to a worrisome 581.74 EH/s. This downturn in hash rate led to an extension in average block time, stretching it to roughly 10 minutes and 36 seconds from the usual 10 minutes. This was before the difficulty took a nosedive at block height 842,688.

Moreover, the dwindling hash rate also played a significant role in recording a new low for the hash price, which took a hit dipping to an approximate $0.049 per TH/s per day. This turn of events affects miner’s profitability, given that the hash price gauges the daily earnings one can expect per unit of hashing power. However, the present downturn in difficulty might offer some respite to miners making block mining a tad easier than it was a fortnight ago.

As Bitcoin’s value exhibits signs of instability, these adjustments in mining difficulty and hash rate couldn’t have come at a more critical time. After scaling a high over $73,000 in March, the price has dropped by 16%, and is now trading at around $61,376. This downturn uncannily parallels the broader trend in mining difficulty, suggesting a potential association between these two factors.

Looking at the recent activity in the Bitcoin exchange-traded funds (ETFs), market trends seem generally lax. Soso Value’s data reveals negligible net inflows or outflows, with Bitwise Bitcoin ETF as the only issuer that observed inflows yesterday. This pattern may hint at a waning interest in Bitcoin investments or a shift in investment tactics following the unpredictable price and mining adjustments.