- BTC mining difficulty rose by 13.5% an unprecedented rise since May 2021.
- Recovering from the chips shortage in 2021 and lower GPU prices, more BTC miners arise.
- The Ethereum Merge shifted ETH-PoW miners to mine BTC.
On October 10, Bitcoin’s (BTC) mining difficulty significantly rose to hit a record high since May 2021. The mining difficulty of BTC rose by 13.5% to 35.61T with an average hash rate of 254.80 EH/s. However, as opposed to the theory where the price goes up when the difficulty of mining is increased, BTC has been up only 2.6% in the last 14 days.
On October 10, the Bitcoin mining difficulty increased significantly by 13.55% to 35.61T, a record high and the largest increase since May 13, 2021. But Bitcoin has gained only 2.6% in the last 14d. Miners face more pressure. https://t.co/vgAkEgyDOf pic.twitter.com/d9Zg433j33— Wu Blockchain (@WuBlockchain) October 10, 2022
The increased hash rate seems to be giving miners an even more tedious task in an already harsh crypto winter and inflation-infested market.
Notably, as per the sources, there could be a few reasons that gave way to the rise of the hash rate or the difficulty of mining.
With the global markets recovering from the chip shortages in 2021, where the GPU (graphic processing unit), an important mining component, came down in price; many BTC miners took advantage of the lower prices to ramp up their devices. In addition, mining rig providers such as Bitmain lowered their prices in an attempt to bring profit to crypto miners. This resulted in more miners entering the mining arena which gave rise to the hash rate.
Moreover, as per Bitcoin Magazine PRO, the exodus of the Chinese Miners due to the ban by the country raised interest in countries like Kazakhstan, Canada, and Germany to fill in the gap. As a result, BTC mining became less reliant on China.
However, data from Cambridge Centre for Alternative Finance revealed that China resumed mining just three months after the ban which gave more supplement for the rise to the hash rate.
In addition, it is also believed that the Ethereum Merge which left the proof-of-work miners in no man’s land after shifting to proof of stake had the miner repurpose and use their equipment for mining BTC which could have given rise to the hash rate.
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