The Latest Bitcoin Difficulty Adjustment
The Bitcoin network recently underwent a difficulty adjustment, resulting in a further increase in mining difficulty. This adjustment marked the sixth consecutive rise in BTC mining difficulty, reaching a record high. The continuous increase in mining difficulty could have an impact on the price of Bitcoin.
The latest adjustment occurred at block 818,496, bringing the current Bitcoin mining difficulty to an all-time high of 67.96T. In the past 24 hours alone, the network saw a 3.40% increase in mining difficulty. This follows a rising trend in the average Bitcoin mining difficulty over the past 90 days.
Over the last 90 days, there has been an overall increase of 22.18% in mining difficulty. In the last 30 days, there has been an 11.35% increase, and in the last 7 days, there has been a 5.07% increase.
Bitcoin difficulty measures the computational power required to mine the next Bitcoin block. Adjustments are made to maintain block generation within the set block time of 10 minutes.
An increase in mining difficulty occurs when more hashing power is added to the network to maintain consistent block times. As a result, miners may earn fewer rewards due to the increased total network hashrate. This ensures optimal network functioning while avoiding inflation of miners’ rewards.
How This Affects Bitcoin’s Price
Interestingly, there appears to be a correlation between BTC’s price and its difficulty. Bitcoin’s price has been rising alongside the increasing network difficulty. It is projected that if the network difficulty were to reach 72T, Bitcoin’s price could reach $40,000. This correlation may be influenced by the level of activity on the network.
Liquidity is flowing into the Bitcoin ecosystem, leading to an increase in price, and more miners are taking advantage of this opportunity. This could explain the significant rise in network difficulty. Additionally, the network’s hashrate has also experienced exponential growth.
Notably, daily transaction fees on the Bitcoin network recently surpassed fees on the Ethereum network, indicating the potential for another rally in the cryptocurrency’s price.
However, considering the correlation between BTC’s price and the network’s difficulty, reaching $40,000 may not happen soon. The next adjustment, estimated to occur on December 10, is expected to result in a decrease in mining difficulty.
As of now, BTC is trading at around $37,300, experiencing a decrease of over 1% in the last 24 hours.
Hot Take: The Impact of Rising Bitcoin Mining Difficulty on Price
The recent increase in Bitcoin mining difficulty marks a new record high. This trend of consecutive rises could potentially affect the price of Bitcoin. As mining difficulty continues to increase, more computational power is required for mining operations. This increased demand for resources may lead to higher costs for miners and potentially impact Bitcoin’s supply and demand dynamics. Additionally, the correlation between BTC’s price and mining difficulty suggests that further increases in difficulty could drive up the price of Bitcoin. However, it is important to consider other factors that influence the cryptocurrency market and exercise caution when predicting future price movements based solely on mining difficulty.
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