Bitcoin mining difficulty, a metric that measures how easily a new block can be mined, has doubled in the last two years.
Data from BTC.com shows that mining difficulty now sits at 49.55 trillion and is forecasted to jump 3.5% to 51.06 trillion on May 31. The rise in difficulty corresponds to the rising hashrate across the network, ensuring the time to mine a new block stays around 10 minutes.
The increased level of difficulty means higher competition, and thereby, lower profits for miners across the board. Major Bitcoin mining firm Marathon Digital noted in a May 2 operational update that upward changes in mining difficulty could materially affect its production of Bitcoin for the year.
However, the majority of Bitcoin miners showed conviction in the digital asset, opting to retain their mined coins instead of selling them. On-chain analytics firm Glassnode noted that Bitcoin miners have expanded their balance sheet by 8,200 BTC since the selloff observed following FTX’s implosion.
Following a large outflow of #Bitcoin across the FTX implosion, Miners (excluding Patoshi and early unlabelled Miners) have expanded their balance sheet by +8.2K BTC, increasing their holdings to a total of 78.5K BTC. pic.twitter.com/n54ENcTSBC
— glassnode (@glassnode) May 25, 2023
“One of the biggest differences between this Bitcoin bear market and the last one is that in 2019 hash rate didn’t reach new highs until BTC ~3xed off its lows while today hash rate has over 2xed its prior May 2021 high while BTC itself is only up 75% off its lows,” noted Will Clemente, co-founder of Reflexivity Research, on Twitter.
The newest entrant to the Bitcoin mining industry is stablecoin issuer Tether, which plans to start a Bitcoin mining operation powered by sustainable energy in Uruguay.
“Our unwavering commitment to renewable energy ensures that every Bitcoin we mine leaves a minimal ecological footprint while upholding the security and integrity of the Bitcoin network,” said Tether CTO Paolo Ardoino in a press release on Tuesday.
Bitcoin was trading at $27,000 during the early hours of Wednesday morning, down 2.37% over the last 24 hours.