In a notable development for the Bitcoin network, mining difficulty has plunged to its lowest level since December 2022, marking a significant shift in the landscape of cryptocurrency mining.
As reported by BTC.com, on May 9th, the mining difficulty for Bitcoin (BTC) experienced a substantial decline, dropping by 5.63% to 83.15 T. This level hasn’t been seen since the bear market phase of 2022, which was characterized by a series of industry setbacks, including the collapse of Terra and FTX.
The drop in mining difficulty can be attributed to various factors, notably the diminishing profitability of mining operations following the recent Bitcoin halving. With the average hashrate over a two-week period dwindling to 595 EH/s from 630 EH/s, it suggests that miners may have shut down equipment deemed unprofitable in the current market conditions.
The next adjustment in mining difficulty is slated for May 23, with a projected decrease of 0.19%.
Following the reduction in block rewards from 6.25 BTC to 3.125 BTC on April 20, mining difficulty initially surged due to increased transaction fees on the Bitcoin network. However, miners’ overall income remained relatively stable despite the halving of rewards.
In early May, daily revenue for Bitcoin miners plummeted to levels reminiscent of October 2023, with total miner income recorded at $26.38 million on May 3, according to data from Blockchain.com.
Ki Young Ju, founder and CEO of analytical firm CryptoQuant, noted the absence of signs indicating miner capitulation. He suggested that Bitcoin’s price should ideally reach $80,000 to maintain profitability for miners following the halving of block rewards.
The recent decline in mining difficulty underscores the evolving dynamics of the Bitcoin mining ecosystem, prompting miners to reassess their strategies amidst changing market conditions and regulatory landscapes.
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