Bitcoin mining difficulty has reached its lowest level since December 2022, marking a notable decline in the computational effort required to mine new blocks in the Bitcoin blockchain.
According to data from BTC.com, on May 9th, the mining difficulty for Bitcoin dropped by 5.63% to 83.15 T. This level mirrors the difficulty observed during the bear market phase of 2022, which was characterized by a series of bankruptcies within the crypto industry, including the collapse of prominent firms like Terra and FTX.
The decrease in mining difficulty can be attributed to several factors, including the potential shutdown of mining equipment by miners facing unprofitability in the wake of the recent Bitcoin halving. Since the previous adjustment, the average hashrate over a two-week period declined from 630 EH/s to 595 EH/s, signaling a reduction in computational power dedicated to Bitcoin mining.
The next adjustment in mining difficulty is scheduled for May 23rd, with a projected decrease of 0.19%. This adjustment mechanism aims to maintain a consistent block generation time of approximately 10 minutes on the Bitcoin network.
Following the halving of the block reward from 6.25 BTC to 3.125 BTC on April 20th, mining difficulty initially surged due to higher transaction fees on the Bitcoin network. However, miners’ income remained largely unaffected by the halving, with the decline in block rewards offset by increased transaction fees.
Recent data from Blockchain.com indicates a decline in daily revenue for Bitcoin miners, reaching levels last seen in October 2023. On May 3rd, total miner income dipped to $26.38 million, reflecting the challenges faced by miners amid changing market dynamics.
Despite the decline in mining difficulty and revenue, Ki Young Ju, founder and CEO of the analytical firm CryptoQuant, noted the absence of signs indicating capitulation among miners. Ju suggested that Bitcoin’s price, in order to provide sufficient profitability for miners post-halving, should ideally stabilize around $80,000.
As Bitcoin’s mining landscape continues to evolve, stakeholders monitor these developments closely, anticipating their impact on network security, miner profitability, and overall market dynamics.
