Bitcoin Mining Is Now As Easy As It Was In 2022

Three months after the fourth Bitcoin halving, Bitcoin's mining difficulty has dropped to lows last seen in late 2022.

What Happened: Bitcoin's mining difficulty dropped by 7.8% over the weekend, a reduction reminiscent of the decline seen after the FTX collapse in 2022, according to CoinDesk.

Data from Coinwarz indicates that Bitcoin's mining difficulty fell from 83.6 terahash per second (TH/s) to 79.50 TH/s on June 5. This level was last observed in March, just before the halving in April.

CryptoQuant's head of research, Julio Moreno, noted that the network hashrate experienced a 7.8% drawdown, similar to the post-FTX collapse in December 2022. He mentioned that miners' daily revenues have decreased from $78 million to $26 million since the halving.

Moreno added that the decline in mining difficulty has been ongoing since early May due to a lower network hashrate. This is attributed to some miners shutting down their equipment in response to decreased profitability.

Downward adjustments in mining difficulty result in a proportional decrease in the network's hashing power. This can benefit smaller miners and potentially lead to profits for previously unprofitable mining farms.

Miners were a major source of Bitcoin selling pressure in June, liquidating over $1 billion worth of BTC in two weeks. This selling pressure kept Bitcoin in a range between $65,000 and $70,000.

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Why It Matters: The drop in Bitcoin mining difficulty comes as the mining sector is undergoing consolidation.

On July 2, Iris Energy Limited IREN announced securing $413 million to expand its Bitcoin mining operations. This funding is part of a broader capital raise of $425.3 million, aimed at enhancing data center capacity and scaling mining operations. The expansion plans indicate a bullish outlook for the mining sector, despite the recent drop in mining difficulty.

Jameson Lopp, a prominent Bitcoin advocate, also highlighted the theft of Bitcoin mining equipment. The rapid depreciation of Bitcoin mining devices is another challenge the mining industry faces.

What’s Next: The challenges faced by Bitcoin miners are expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image created using artificial intelligence with Midjourney.