Bitcoin Mining Difficulty Adjusts Upward Amid BTC’s Recent Price Recovery

Bitcoin mining difficulty saw a slight increase of 1.44%, to 84.38 trillion after a 5.9% decline to 83.14 trillion on May 9.

This comes as BTC has seen a significant price rebound and has been hovering near its recently set peak above $70,000.

High difficulty of Bitcoin

Difficulty refers to how difficult it is to mine a new block on the Bitcoin blockchain, with recalibration approximately every two weeks to maintain a constant block production time of about 10 minutes. The recent spike represents a shift towards more challenging conditions for miners, reflecting ongoing adjustments in the network to maintain a constant block production rate.

⚠️ #Bitcoin Mining difficulty increased by 1.44%!

-> after $ Bitcoin Difficulty fell 5.9% to 83.14t on May 9, and is on the rise again, currently at 84.38t
-> The next modification is expected to be made on June 4 and is estimated to increase the difficulty level by 10.9% pic.twitter.com/COKETVmZni

— CryptoPotato Admin (@Crypto_Potato) May 23, 2024

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

Bitcoin's price has regained some ground, rising to $70,000 before falling over $2,000 in the last few hours ahead of the US Securities and Exchange Commission's decision on Ethereum ETFs.

This price rebound, combined with the recent halving event, which reduced the block reward, is creating a mixed effect on miners. The halving on April 20 halved the block reward to 3,125 BTC. As a result, daily mining output dropped from 900 BTC to around 450 BTC.

While the higher price boosts potential revenue for miners, the increased difficulty and lower rewards mean that they must invest in more efficient hardware and incur higher operating costs to remain profitable.

Miner surrender

During the last adjustment earlier this month, Bitcoin mining difficulty fell by about 6%, representing the largest decline since the crypto winter of December 2022. This reduction was considered beneficial to some miners by broker Bernstein in his research report.

As Bitcoin prices fell and costs nearly doubled since the halving, less efficient mining equipment was shut down, causing the hash rate to decline.

The first signs of declining miner revenues did not appear until a month after the halving. The data pointed towards the miners' surrender.

However, the drop in hash rate was short-lived, as the numbers recovered shortly afterwards and currently stand near 590 exahashes per second (EH/s) according to the data. Assembly and production By Bitinfocharts. This can be attributed to renewed speculation regarding the approval of Ethereum ETFs and subsequent spikes in cryptocurrency prices.