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October 5, 2022
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Mining difficulty is Stable despite the price rising more than 300%

After Halving, the price of Bitcoin goes from $ 9000 to over $ 40,000, but the Mining Difficulty is Stable!

Today we see the Bitcoin bulls in a rematch after the fall of the weekend. Although the biggest crypto rose just 3%, it is still good news, considering the fall of last week.

Despite the recent turmoil, Bitcoin’s macro performance has been remarkable since the end of the third quarter of 2020. Although the previous period saw many months around $ 10,000, the end of October 2020 was when things really started to take off, when the price breaks $ 13,200.00.

During this period, Bitcoin recorded gains of almost 300% before reaching $ 42,000. What was particularly special about this was the speed and strength of the movement, which forced crypto-skeptics to question their position.

On this, Marcus Swanepoel, the chief executive of crypto exchange Luno, said:

“Even the most optimistic of bitcoin’s defenders could not have predicted such a meteoric rise in price in such a short space of time.”

Since the $ 42k rejection, a sense of normalcy has returned. With that, the opportunity arises to assess the impact of the race in relation to other metrics.

In this, the analysis of the Twitter, PlanB noted that the mining difficulty remained comparatively stable, despite exponential gains during this period.

In the past, mining difficulties increased as the price of Bitcoin increased. The most striking example of this relationship is shown in the chart below, in 2013. During that time, the mining difficulty increased sharply, as BTC went from just over $ 10 to $ 1,000.

What is happening with the Bitcoin mining difficulty?

Bitcoin mining difficulty is a measure of how difficult it is to extract a Bitcoin block. The high difficulty of mining means that more computing capacity will be needed to extract the same number of blocks.

The difficulty is adjusted algorithmically every 2,016 blocks, which occurs approximately every two weeks.

A more detailed analysis shows that the mining difficulty in early October 2020 was 19.32 t. Although it fell to just 16.79 t in early November, the difficulty was readjusted upwards at the end of the year, to 18.6 t.

Throughout January 2021, as the difficulty became more difficult, it led to a current difficulty of 20.61 t.

Mining difficulty is stable even with the price increase

But even so, a 3 t swing is a relatively stagnant level of difficulty adjustment, especially considering the $ 32k price swing in the same period.

This suggests that new miners are not joining the network, despite increased profitability. We would expect to see the mining difficulty increase much more to reflect the increased competition if that were the case.

O Bitmain’s official website shows that his AntMiner S19 Pro, S19 and T19 are all sold out by August 2021.

Likewise, there is a similar story at MicroBT, but with no indication of when products are back in stock.

As such, the scarcity of supply from ASIC miners is probably the reason why the mining difficulty remains stable in relation to price.

Source: CryptoSlate

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