Bitcoin Mining Difficulty Nears All-Time High Despite Fall in Profitability

Bitcoin (BTC) mining difficulty has jumped by 9.26% to 30.98 trillion, exceeding expectations, pushing the difficulty close to its all-time high. The rate peaked at 31.25 trillion on May 11.

The latest increase is higher than predicted by consultancy firm Blocksbridge, who had priced in a 6.8% increase. While that prediction was already quite bullish, the competition for rewards is even stronger than analysts previously believed.

A potentially bullish signal

The strength of competition for mining rewards suggests that miners are in a bullish mood, far more so than traders. The price of BTC continues to hover around the $20,000 mark, but with increased mining hardware joining the network, it appears that miners may be predicting upwards price movement in the near future. 

While miners may be concluding that the crypto winter is beginning to thaw, at least one analyst believes that the increase in mining difficulty may be linked to actual winter.

Jason Dean, of Quantum Economics, said on Twitter, “Personally, I think as more hashrate comes from the U.S., we’ll see a new annual seasonal trend like we used to see in China. i.e. hot months lower hashrate/helping to stabilize grid, cool months higher hashrate.”

Should Dean prove right, as the months grow cooler, miners can expect the market temperature to continue to rise.   

Mining elsewhere

While Bitcoin miners are looking ahead to increased competition, Ethereum miners are shopping around for other options as the network moves from proof-of-work (PoW) to proof-of-stake (PoS).

One option for the soon-to-be redundant miners is to move to a PoW Ethereum fork such as Ethereum Classic (ETC) or the newly created ETHPoW (ETHW).

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