Relief to Bitcoin Miners as Difficulty About To Drop Sharply
Bitcoin (BTC) mining difficulty is about to drop sharply, almost reaching levels seen in January, while at the same time, the coin's price is much higher since the year began - spelling good news for miners.
Bitcoin mining difficulty, or the measure of how hard it is to compete for mining rewards, is expected to drop more than 11% in a day, as mining pool BTC.com estimates at 7:17 UTC.
This drop would be significant for three reasons:
- It would bring the difficulty down to 20.88 T, which is the lowest it has been since January this year, when the difficulty was on the rise.
- In the last year, or since the beginning of April 2020 to be precise, there have been only nine drops. This one would be the second-highest among them, following November's 16% fall - itself the second-largest drop in the history of the network.
- At the same time the difficulty would see a massive drop, bitcoin's price is recording much higher levels since the year began. On January 1, BTC was trading at USD 30,700. Since then, the price had hit a series of all-time highs and, at the time of writing, it's standing at USD 54,444 - a 77% rise in four months.
The mining difficulty of Bitcoin is adjusted around every two weeks (that is, every 2016 blocks) to maintain the normal 10-minute block time. The 7-day simple moving average block time on April 29 was 10.8 minutes.
Per BitInfoCharts.com, hashrate, or the computational power of the network, is back on the rise. The 7-day simple moving average hashrate plunged 21% between April 16 and April 23. It's been rising since, going up 16% and standing at 139.35 Eh/s on April 29.
Meanwhile, in the past 5 weeks, miners have been spending more coins than they've been holding, according to ByteTree. Miners usually build their inventory during market weakness and sell into strength.
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(Updated at 09:36 UTC: with a BTC mining profitability chart.)