Mining New Bitcoin Is More Difficult Than Ever. Here’s How it Could Impact BTC Prices

The mining difficulty reached 92.6 trillion hashes around Wednesday evening, according to Coinwarz data. In the past month, it has increased by four units, and over the last two months, it has risen by more than 10%.

As an analyst, I’d rephrase it like this: The term ‘terahashes’ represents the computational effort required to process individual blocks in a proof-of-work blockchain system, such as Bitcoin. Essentially, it signifies how complex and time-consuming it is to find the correct hash for each block. Miners, who are entities involved in this process, employ powerful computing systems to mine these blocks. They are then compensated with Bitcoins, which they often sell on the open market to cover expenses and generate profits.

Every fortnight, I witness an automatic adjustment in the mining challenge of fresh blocks within our blockchain, all thanks to the collective efforts of my fellow miners and the sheer power of our combined computational resources. This adjustment is based on our number and the total hashpower we wield, a measure that reflects the amount of processing power our network consumes.

According to Coinwarz, it’s predicted that the next adjustment in Bitcoin’s mining difficulty will take place on September 27. This adjustment is expected to lower the mining difficulty from approximately 92.67 trillion to 77.12 trillion.

An increase in mining difficulty for Bitcoin could squeeze the profit margins of mining companies, because the expenses needed to maintain their operations become more substantial – making an already challenging situation even harder for these businesses to navigate.

After the halving, many mining companies have been experiencing financial strain, according to Augustine Fan, the head of insights at SOFA. Despite this, he thinks that the current market turbulence is mainly driven by traders closing their positions due to stops and withdrawals from ETFs.

Some traders believe that the price movement of Bitcoin might be influenced by broader market trends as well as the strategies employed by miners in response to an increase in mining difficulty.

According to Peter Chung, the director of research at Presto, there’s no direct connection between the complexity of Bitcoin mining and its price. While increased mining difficulty does put pressure on miners, it’s ultimately up to each miner individually how they respond to this stress.

According to Min Jung, a research analyst at Presto, there might be an increase in sell-offs due to the prevailing market mood.

Jung stated in a message, ‘Should equities become weak and there are indications of instability within the broader financial markets, this could trigger selling activity. The rationale behind this is that people might prefer to cut their losses now rather than risk them growing larger later.’