Bitcoin mining difficulty has surged to a new all-time high of 110.45 trillion after eight consecutive positive adjustments.
Bitcoin mining difficulty has surged to a new all-time high of 110.45 trillion after eight consecutive positive adjustments. This marks a significant increase from the original difficulty, making mining approximately 110.45 trillion times harder than when Bitcoin was first introduced. Despite this rising difficulty, Bitcoin miners are still operating with a threefold profitability margin. According to Glassnode’s Difficulty Regression Model, the cost to mine one Bitcoin is estimated at $33,900, while the cryptocurrency’s price stood at around $105,578 as of Jan. 21. The growing competition in mining, however, is reducing the overall profitability, as more miners join the pool and the hashrate rises.
The Bitcoin network’s hashrate is a key indicator of the strength and resilience of the ecosystem. A year ago, the hashrate was around 600 exahashes per second (EH/s), but it now ranges between 700 and 900 EH/s. This shows that, despite the increasing difficulty, the network is growing stronger as more participants continue to join. Data from Glassnode shows that revenue per exahash currently stands at $60,800, but miners' cash flow per mined block decreased significantly after the Bitcoin halving event in April, which cut block rewards from 6.25 BTC to 3.12 BTC.
In response to the rising difficulty and competition, Bitcoin miners are increasingly diversifying their activities. Some mining companies have expanded into high-performance computing (HPC) and artificial intelligence (AI) to supplement their earnings. Hive Digital, for example, repurposed its Nvidia machines for AI applications, generating $2 per hour in revenue, a significant increase from the $0.12 per hour generated from crypto mining. Other companies, such as MARA Holdings, have issued convertible bonds to purchase Bitcoin and have started lending out their Bitcoin for additional income, demonstrating how miners must adapt to maintain profitability in a more competitive landscape.
The high difficulty and growing competition also show the adaptability of the Bitcoin mining industry. Mining remains essential for securing the Bitcoin network, and miners have proven their resilience in the face of challenges. In Texas, Bitcoin miners saved the state $18 billion by helping stabilize the energy grid, eliminating the need for new gas peaker plants. Additionally, many miners are now holding onto their mined Bitcoin, following strategies similar to those of companies like MicroStrategy. This move reflects the trend of Bitcoin miners increasingly stacking up reserves rather than selling immediately.
Bitcoin's mining difficulty and hashrate growth reflect the overall strength of the network. Even though miners face rising costs and increasing competition, they continue to innovate and adapt, ensuring the sustainability and security of the Bitcoin network.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
