The Difficulties in mining Bitcoin has risen to a new record high, putting pressure on profit margins. At 92.67 trillion, the difficulty index surpassed the previous record high of 90.67 trillion reached in July this year.
This 3.6% increase represents the increased competitiveness that comes from record-breaking hashrate values. It highlights how resilient and secure the network is becoming as Bitcoin mining requires more computing power.
Source: CoinWarz
Miners are liquidating their Bitcoin holdings
Interestingly, since September 8, miners have sold nearly 30,000 Bitcoin, worth approximately $1.71 billion. This significant sell-off points to potential liquidity issues or concerns about future price movements among miners.
The added difficulty comes at a difficult time for miners, who are still adjusting to the effects of April’s “halving,” a programmed reduction in mining rewards that has already halved potential profits, helping to explain the roughly 10% drop in Bitcoin’s price.
Source: CoinWarz
Miner only secures block reward
Despite the difficulties, a single miner achieved a block reward of approximately $180,000. This unusual success underscores how much individual miners can still produce despite the mounting challenges.
NEWS: Alone #Bitcoin miner wins $180K (3,169 $BTC) reward after successfully mining block 860749. photo.twitter.com/KrBDOw99ue
—CoinGecko (@coingecko) September 11, 2024
The increasing difficulty hasn’t stopped miners from improving their operations either. In September, Bitcoin’s hashrate hit an all-time high, which measures the overall computational capacity that sustains the network. This implies that miners are betting on a big price increase in the near future.
Impact on publicly listed miners
The increase in the complexity of mining has increased competition and squeezed profit margins for publicly traded bitcoin miners. These difficulties have led to major mining companies announcing notable drops in their stock prices and production rates.
This year, shares of Marathon Digital Inc. have fallen 31%, while Riot Platform has fallen 54%. The stock performance of several highly traded mining companies reflects the overall struggles of the crypto mining industry.
The effects on The price of Bitcoin are still unknown, with potential implications for long-term network security and temporary price fluctuations. While some worry that the significant volume of BTC being sold by miners could cause selling pressure and a potential drop in Bitcoin’s price, others see the increase in mining difficulty as a good indication of network security and investor confidence.
Therefore, every investor should follow these developments to make a wise choice about financial strategy. Reflecting the uncertainties about the current market conditions, the optimistic attitudes of the Bitcoin community have also dropped to 21% of the 51,341 respondents surveyed.
Main image of Bankless, chart from TradingView