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Bitcoin Mining Difficulty Hits All-Time High Ahead of Halving

Bitcoin’s mining difficulty has reached a historic high of 86.4 trillion as companies ramp up their computing capacity in preparation for the upcoming halving event in April.

According to data from btc.com, Bitcoin’s mining difficulty, which measures the computational power required to solve complex mathematical equations and unlock new Bitcoins, has surged by approximately 600% since the last halving in 2020. This continuous uptrend has been observed since May 2021.

With the code change scheduled for April 20, miners are striving to accumulate more Bitcoin and strengthen their cash reserves before block rewards are halved. Currently, block rewards serve as the primary source of income for miners, but soon they will decrease to 3.15 BTC, consequently reducing daily Bitcoin issuance from 900 to 450.

While historical data suggests that Bitcoin prices typically experience a short-term decline of 15% to 40% before halving events, followed by long-term bullish trends, there are concerns about potential market volatility post-halving. Bakhrom Saydulloev, Mercuryo’s product lead, warned of a possible short to mid-term retracement triggered by miners liquidating their BTC holdings to cover operational costs.

Saydulloev noted that previous halvings occurred in more favorable economic and investment climates, whereas the current uncertainty surrounding crypto regulations could exacerbate market fluctuations. However, the emergence of spot Bitcoin ETFs, which have already attracted over $200 billion in trading volume in less than four months, could mitigate some of these concerns by facilitating increased cash flow into the cryptocurrency market.

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