Bitcoin’s mining difficulty rate rises by 6%written by Bella Palmer
The hash rate declined below 100 for the first time since May 2020 due to the Chinese mining exodus which accounted for nearly 65% of the Bitcoin mining industry
Bitcoin’s mining difficulty rate has risen by 6%, marking the first difficulty hike in eight weeks. The mining difficulty rate is a measure of how hard it is for a miner to successfully hash a BTC.
The incremental rise, which automatically came into effect on July 31, indicates that mining competition is intensifying as many exiled Chinese miners resume operations after China’s clampdown on crypto mining in June.
However, Bitcoin mining is still 48% easier than it was before China’s moves.
A continuous eight week drop in mining difficult rates across four intervals is largely unprecedented.
The hash rate declined below 100 for the first time since May 2020 due to the Chinese mining exodus which accounted for nearly 65% of the Bitcoin mining industry.
A recovering hash rate can be interpreted as a bullish signal, however, a 2020 Russian study of BTC price and hash rates revealed that price impacts on hash rate more than vice versa.
The difficulty rate is a critical for miners as it’s closely linked to their profit margins and also informs miners on their decisions to sell.
There has seen a series of rise and falls in the BTC hash rate especially during 2018 due to the volatility of the Bitcoin price over the past few years.
The hash rate saw a shock decline of 29% in March 2020 in anticipation of 2020’s Bitcoin block reward halving event.
It is worth considering that the hash rate has remained above 100 EH/s for the best part of the past year despite the January 2021 bull run prompting an all-time high (a 21.5% rise) in the mining difficulty rate.
This article is for information purposes only.
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