This Thursday, the mining difficulty of Bitcoin (BTC) reached a new all-time high, once again reducing shrinking profit margins for miners. This indicator, which measures the difficulty of obtaining mining rewards, increased by 4.13%, reaching 28.59 T, compared to the previous ATH of 27.97 T observed in mid-February.
Although the percentage was far from the highest this year, it was enough to drive this new high, as this rise in difficulty follows two consecutive relatively small drops that had caused the difficulty to drop slightly from to the previous ATH.
However, the hashrate, or network computing power, has seen a slight dip since the previous difficulty adjustment two weeks ago. Between that date and March 29, the 7-day moving average hashrate remained virtually unchanged, according to data from BitInfoCharts.com.
During the same period, the profitability of Bitcoin mining increased by just over 14%, as the price of BTC was also up, from $40,922 on March 17 to $47,885 on March 29.
Bitcoin mining difficulty is adjusted approximately every two weeks (or more precisely, every 2016 blocks) to maintain the normal block time of 10 minutes. On March 29, the 7-day average block creation time was 9.54 minutes.
According to data from ByteTreeover the past week, miners have kept more of their newly generated BTC, compared to what they have spent, while in previous weeks it was the opposite.
Moreover, the latest report from the analysis company Corner Metrics noted that mining has become “an economically significant industry”, and that in 2021, the total income of Bitcoin miners was around $17 billion. This year, in the wake of China’s crackdown on BTC and cryptocurrency mining, “North American-based miners have emerged as the new global industry leaders,” they said, adding:
“2022 is shaping up to be another big year.”
Several other factors come into play, including:
- The Bitcoin hashrate was at an ATH on March 29 of 200 PE/s, when measured on a 30-day moving average;
- More miners have been enticed to go online recently due to the positive economic incentives at the current price of BTC;
- For this year, Bitcoin miners have recorded over $3 billion in revenue so far, the vast majority of which comes from block rewards.
Analysts concluded that,
“The tectonic shifts in the geographic distribution of miners in a year have created new opportunities. An increasingly institutional and mature mining industry is tapping into the depth of U.S. financial markets, while synergies between existing energy infrastructure and mining of bitcoin are starting to surface.”
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