Bitcoin mining difficulty adjustment may force miners to dump their BTC
Last week, the bitcoin hash rate reached a new all-time high after a massive growth. While this was a welcome development, it had significant implications for the next mining difficulty adjustment that took place on Monday. As expected, the difficulty adjustment had jumped by double digits, beating even the highest forecasts.
Difficulty is adjusted by 13.5%
Over the past week, the forecasts for the bitcoin mining difficulty adjustment put it at a high level
9-12%. These ranged from the conservative side to the worst-case scenario, but regardless, the network would mark the highest difficulty adjustment so far for the year 2022. However, even these predictions did not do justice to the actual adjustment.
On Monday, the mining difficulty (how many hashes are required to mine a BTC block) jumped from 31.36T to 35.61T, an increase of 13.5%. This higher difficulty adjustment is in line with the increasing mining power as more bitcoin miners bring their machines online.
Mining difficulty adjusts by 13.5% | Source: Coinwarz
Interestingly, the difficulty of bitcoin mining is not expected to decrease anytime soon. The next difficulty adjustment will take place on Sunday, October 23, 2022, with another expected increase of 11.3%. Over the next three months, mining difficulty is expected to increase by 22.5%.
As for the bitcoin hash rate, it has seen some decline since reaching its all-time high of 321 EH/s. It currently stands at 291.4 EH/s at the time of writing, a high figure for the year 2022.
Will Bitcoin Miners Dump BTC?
The high difficulty adjustment will undoubtedly affect bitcoin miner profits during this time. This means they have to send more computing power and more energy to mine a block, which affects their bottom line. Add to that the fact that the bitcoin price is struggling to stay above $19,000, and miners are in a tight spot.
BTC settles above $19,000 | Source: BTCUSD on TradingView.com
Since the beginning of the year, there have been times when some bitcoin miners have been forced to dump their BTC holdings to finance their operations, and this adjustment could trigger another selling trend among them. Since it costs them just over $18,000 to mine a single BTC, bitcoin’s loss dance below $19,000 puts them dangerously close to recording losses on their mining machines, which could prompt a selloff.
The earnings of Bitcoin miners currently stands at $17.16 million per day. With 6.25 BTC mined in an average of 10 minutes, miners produce a total of 900 BTC every day.
Featured image from Bloomberg, chart from TradingView.com
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