Bitcoin (BTC) continues to break records in its ecosystem, with the mining difficulty adjustment reaching a new all-time high of 110.45 trillion. This means that the difficulty is approximately 110.45 trillion times harder than it was at the inception of Bitcoin.
The difficulty adjustment occurs every 2,016 blocks, ensuring that blocks are mined on average every 10 minutes. This recent adjustment marks the eighth consecutive positive change in difficulty, making it more challenging for miners to earn bitcoin rewards.
As the mining industry becomes increasingly competitive, some publicly traded miners have diversified into high-performance computing (HPC) and artificial intelligence (AI) sectors to stay afloat. For instance, MARA Holdings (MARA) has issued convertible bonds to purchase bitcoin and has optimized revenue by lending out their bitcoin for single-digit yields.
This pattern of consecutive positive adjustments has been observed before, notably in the summer of 2021 following the China mining ban, which caused a 50% drop in hashrate. Subsequently, from July to November 2021, there were nine consecutive positive adjustments, culminating in the bull market peak when bitcoin reached $69,000. This was followed by a bear market throughout 2022, with the last positive adjustment signaling the market top in 2021.
Conversely, in 2018, bitcoin experienced 17 positive adjustments from December 2017, leading up to the bull market peak at $20,000. A single negative adjustment occurred in July 2018, when the price was around $6,000. This was followed by six more positive adjustments before several negative adjustments in Q4 2018, coinciding with bitcoin’s cycle bottom at $3,000.
While there is no definitive trend associated with consecutive positive adjustments, they have historically indicated market tops and bottoms. The current hashrate, on a 7-day moving average, stands at 775 EH/s, with projections suggesting it could reach 1 zettahash per second before the next halving.
Overall, the continuous evolution of bitcoin’s mining difficulty reflects the dynamic nature of the cryptocurrency market and the resilience of its network in adapting to challenges and opportunities.