Bitcoins hashrate, mining problems have these updates for you
Bitcoin [BTC], the biggest cryptocurrency battle continues to see new days and nights in the crypto market. While investors feared losing their savings to the price correction, BTC miners may have taken a different route to deal with this fall.
Difficulties
Bitcoin recorded its worst August performance since 2015 after the monthly candle closed down 14%. In fact, at press time, BTC fell below the $2ok mark as it traded around $19.9k. Here is a red-painted seven-day layout for the largest token.
Source: CoinMarketCap
After the free fall, many analysts have put forward bearish trends to alert Bitcoin enthusiasts. For example, Crypto Tony warned that the (Bitcoin) stage was set for deeper losses ahead. In a tweet sent out on September 1, the well-known trader wrote added,
This is my go to macro #Bitcoin now and until we see
– A change in market behavior and becoming macro bullish (taking out $30,000 and entering a higher high)
I’m leaning against a macro roller blind, which I’ll look to enter #Altcoins too remember
— Crypto Tony (@CryptoTony__) 1 September 2022
Needless to say, the said drop even saw heavy liquidations with the BTC spot market. This means traders started selling their holdings. But not everyone took the same approach.
The road less traveled
Surprisingly, miners have not given up on Bitcoin yet, as the difficulty of mining reached a significant peak. BTC initiated a mining difficulty adjustment at block height 751,968, and the mining difficulty increased significantly by 9.26% to 30.98T.
Source: BTC.com
According to data from chain monitoring resource BTC.com, this will be the highest upward difficulty adjustment since January of this year.
Moreover, this number represented a 9.26% increase since August 18, when the mining difficulty was 28.35 trillion.
Well, mining difficulty determines how difficult it is for a miner to verify transactions, collect them into a block and add it to the blockchain.
If there are few miners, the difficulty will drop, while when the number of miners increases, the difficulty of mining increases. Ergo, the increase means great demand.
What does this imply?
Well, both difficulty and increased hash rate reflect conviction among miners about the long-term profitability of their network participation. This conviction comes at a time when mining would not reap the same benefits (profitability).
According to BitInfoCharts, mining profitability has been falling consistently since August 18, when it was at $0.109 per THash/s (based on a seven-day moving average).
Source: BitInfocharts
At the time of writing, profitability dropped to just $0.082 per THash/s. Indeed a worrying signal when combined with BTC’s price drop. In fact, the price fell 17% in a month and 60% in a year.
Now the question remains: Can miners withstand such losses and continue mining(s)? Let’s wait and see.
