Bitcoin‘s mining difficulty surged to an all-time high of 101.65 trillion (T) on Monday, intensifying pressure on smaller miners who may not have the financial resources of their publicly traded counterparts to maintain operations.
Mining difficulty is an important metric that gauges how challenging it is to discover new blocks on the Bitcoin blockchain. The network adjusts this difficulty level every 2,016 blocks, or approximately every two weeks. So far this year, difficulty has adjusted 23 times, with nearly 60% of those adjustments making the process harder. A higher difficulty means more strain on the mining industry, requiring miners to invest more resources to produce a block.
As Bitcoin mining remains a highly competitive and capital-intensive industry, smaller or private miners, who often have less access to cash, may need to sell their mined Bitcoin to finance ongoing operations.
Hashrate Sets Record High
In addition to rising difficulty, Bitcoin’s hashrate hit a record high of 755 exahashes per second (EH/s) on a seven-day moving average last week. Hashrate refers to the computational power required to mine and process transactions on the Bitcoin network. In late October, hashrate surged nearly 12% in a single day, marking one of the largest increases of the year, according to Glassnode data.
On average, miners are currently producing about 450 Bitcoin per day. If all of the mined Bitcoin is sold, it creates significant sell-side pressure, estimated at around $31.5 million in daily sales.
Despite this, the overall outlook for miners remains relatively healthy. When miners retain more of their Bitcoin instead of selling it, the sell-side pressure is reduced, which can help stabilize the market. However, with the increasing difficulty and rising hashrate, smaller miners without strong cash reserves may struggle to stay afloat without resorting to selling larger amounts of their Bitcoin production.
Related Topics:
