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Bitcoin Mining Difficulty Hits All-Time High, But BTC Price Drops to Local Lows

source-logo  beincrypto.com 10 February 2023 07:56, UTC

Bitcoin network difficulty has reached its highest-ever level. However, asset prices are sliding following a regulatory crackdown in the United States.

BTC mining difficulty is at peak levels which means it is now harder than ever to secure the next block.

Miners must perform 39 trillion hashes (39T) to find the next block. Difficulty is often referred to as a measure of competition between Bitcoin miners, or the computational power required for another block to be produced.

According to BitInfoCharts, mining difficulty has increased by 47% since the same time last year. This has put a lot more pressure on miners.

Bitcoin Mining Metrics Latest

Additionally, Bitcoin mining hash rates are also near their peak levels. Bitinfocharts currently reports a hash rate of 300 EH/s (exahashes per second), just shy of its late January peak of 316 EH/s.

Furthermore, hash rates have increased by 50% since February 2022. This is good news for network security but bad news for BTC miners.

As a result of these increasing metrics, mining profitability has tanked to multi-year lows. Since Feb. 2022, mining profitability has tanked 66% to current levels of around $0.073 dollars per day per terahash per second.

Furthermore, Hashrate Index refers to this metric as “hashprice.” The analytics platform reports that hash prices hit an all-time low of $0.055 in late November 2022. During the bull market peak in late 2021, they were as high as $0.40.

BTC Hash Price | Hashrate Index

Bitcoin miners are currently facing a triple whammy of low BTC prices, high difficulty and hash rate, and increasing energy costs.

Bitcoin mining researcher Jaran Mellerud observed that some public mining firms have spent more than half of their revenues on administration. Those that have been more frugal in this area are more likely to weather the storm.

On Feb. 9, mining firm CleanSpark released its fiscal Q1 earnings report. While revenue fell, the company was confident it would keep expanding with more mergers and acquisitions this year.

Furthermore, Hut 8 announced a merger with US Bitcoin Corp earlier this week.

Price Outlook

Bitcoin prices have been battered today, putting even more pressure on miners. The slump came as the SEC cracked down on Kraken’s crypto-staking services.

BTC had dropped almost 4% over the past 12 hours in a fall to $21,870 at the time of press. Additionally, the asset has now lost 7% over the past week as the bears resume pressurizing markets.

BTC/USD 1 week – BeInCrypto