Bitcoin mining difficulty adjusts upwards amid BTC’s recent price recovery

Bitcoin mining difficulty has seen a slight increase of 1.44% to 84.38T after a 5.9% drop to 83.14T on May 9.

It comes as BTC saw a significant price recovery and was near its recently set high above $70,000.

Bitcoin difficulty increases

The difficulty indicates how difficult it is to mine a new block on the Bitcoin blockchain, recalibrating roughly every two weeks to maintain a consistent block production time of around 10 minutes. The latest rally marks a shift towards tougher conditions for miners, reflecting ongoing adjustments to the network to maintain a steady block production rate.

⚠️ #Bitcoin mining difficulty has increased by 1.44%!

-> After the $BTC difficulty dropped 5.9% to 83.14T on May 9th, is rising again, currently at 84.38T
-> The next adjustment is expected on June 4th and it is estimated that the difficulty will increase by 10.9% pic.twitter.com/COKETVmZni

— CryptoPotato Official (@Crypto_Potato) May 23, 2024

The next difficulty adjustment, scheduled for June 4, is expected to be significant, with a current estimated increase of 10.9%.

The price of Bitcoin had regained some ground, rising to $70,000 before dropping more than two thousand in the last few hours ahead of the US SEC ruling on Ethereum ETFs.

This price recovery, along with the recent halving event, which reduced the block reward, creates a mixed impact for miners. The April 20 halving cut the block reward in half to 3,125 BTC. As a result, the daily mining output was reduced from 900 BTC to approximately 450 BTC.

While the higher price increases the potential income for miners, the increased difficulty and reduced rewards make it necessary to invest in more efficient hardware and incur higher operating costs to remain profitable.

Mining capitulation

During the last adjustment earlier this month, Bitcoin mining difficulty dropped by around 6%, marking the biggest drop since the crypto winter of December 2022. This reduction was considered beneficial for some miners by broker Bernstein in his research report.

Due to lower BTC prices and almost doubling of costs since the halving, less efficient mining rigs were shut down, leading to a decrease in the hash rate.

It wasn’t until a month after the halving that the first signs of a reduction in miners’ income emerged. The data pointed towards the capitulation of the miners.

The drop in hash rate was short-lived, however, as the numbers recovered shortly after and currently sits at around 590 exahashes per second (EH/s) according to data compiled by Bitinfocharts. This can be attributed to renewed speculation for the approval of spot Ethereum ETFs and the subsequent rise in cryptocurrency prices.

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