Bitcoin Miners have been dealt another blow as the network’s difficulty rose 14% to a new all-time high of 35.6 trillion on Monday.
Bitcoin mining difficulty is a measure of how many hashes, or guesses, a miner needs to produce the cryptographic string that gives it the right to add the next block of transactions in the chain.
Monday’s difficulty increase is the largest single increase since May when it increased by 22%. The difficulty of the Bitcoin network is set to readjust again in about two weeks, when it is projected to drop just slightly, according to BTC.com.
Bitcoin Mining Difficulty. Source: BTC.com.
Miners have been hit particularly hard by the bear market, with mining revenues down 53% year-to-date, according to Blockchain.com, as the Bitcoin price has struggled to stay above $20,000 since experiencing an 11% drop on September 13.
At the time of writing, Bitcoin was trading at $19,397.27, according to CoinGecko.
Meanwhile, the 30-day average mining revenue has fallen to around $19 million, according to Blockchain.com. That’s lower than it was last year during China’s crackdown on miners, when an estimated 90% of Bitcoin mining in the country was shut down.
Bitcoin just experienced a huge difficulty adjustment, the biggest in over a year.
This reflects how aggressively new rigs have come online and the competition is increasing. Only the most efficient miners will survive these low BTC prices, high energy prices and high difficulty conditions. pic.twitter.com/nzp0XeVT8K
For context, the mining difficulty for the Bitcoin network peaked at 25 trillion last year before falling to 14 trillion after the attack on miners in China. When it did, the hash rate of some of the largest Bitcoin mining pools in China dropped by as much as 37%.
Since then, the difficulty has been steadily rising in 2022, reaching 31 trillion in May before the turmoil stemming from the collapse of TerraUSD and its LUNA governance token hit the market.
Bitcoin miners are feeling the crunch
Last week, Argo Blockchain, which sold $15.6 million of its Bitcoin reserves in July, announced plans to strengthen its balance sheet. At the time, a report from blockchain analytics firm Arcane Research showed that public miners had sold more Bitcoin than they mined in the month of June.
The company said in an SEC filing that it has renegotiated the terms of its $70 million line of credit from NYDIG, sold 3,400 new Bitmain mining rigs for $7 million and potentially secured a $27 million investment.
The company did not identify the investor, but said that if the deal goes through it will control 15% of the shares.
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