Bitcoin Mining Difficulty Notches an All-Time High

Bitcoin has been treading in volatile waters. Despite the recent price dump, though, the Bitcoin network has hit yet another high, this time, in terms of mining difficulty.

Higher Difficulty For Bitcoin Miners

According to the latest data from CoinWarz, the Bitcoin difficulty increased by 5% to 27.97 trillion on February 18. In a span of three weeks, the metric went through positive readjustments twice, with the first one reaching 26.64 trillion on January 21.

To put things into perspective, the mining difficulty figure has grown six times consecutively since November 28, 2021. Thus, it has made it more than 23% harder for miners of the Bitcoin network to confirm a block and extract a block reward since then.

Bitcoin Mining Difficulty. Source: CoinWarz

For the next two weeks, Bitcoin’s mining difficulty will remain at 27.97 trillion. Zooming out, a year back, the metric stood at 21.55 trillion before sustaining four consecutive declines and a subsequent low of 13.67 trillion six months later. The climb since then has been quite impressive, demonstrating significant competition among the miners of the network to find a block.

CryptoPotato earlier reported about the network hash rate tapping a fresh high. Since then, the figures did not show any abrupt changes and continued to hover close to the peak.

At the time of writing, Bitcoin’s hash rate stands at 212.7 exa hash per sec. According to the stats from BTC.com, Foundry USA contributed the most hash power, i.e., 17.8%. AntPool and F2Pool were tied with 15.6% hash power, followed by Binance Pool which contributed 13.3%.

The Conundrum

In a worrying sign of the ongoing correction, Bitcoin miners are offloading their bags. The cryptocurrency was currently trading around $41K, a decrease of about 40% since attaining its ATH last year. As a result, miners have switched from being the net holders to net sellers, according to the Glassnode chart.

Bitcoin Miners Behavior. Source: Glassnode

This is due to the fact that the return on investment has decreased at a greater rate than the price of BTC. With the profit-margins shrinking, Bitcoin miners are in a tight position between choosing to finance their efforts to mine and holding onto the BTC. A high hash rate is a milestone for the network, but this was yet another factor that contributed to the lower profitability of mining.

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