Bitcoin Set for Biggest Mining Difficulty Drop Since July 2021

Mining difficulty on the Bitcoin

blockchain is on course to drop by the most since July 2021 after the amount of mining power securing the network slid about 30% in two weeks.

According to veri from Mempool.space, a downward difficulty adjustment of around 9% is projected within the next five days. That would be the most since the China mining ban four years ago, when the hashrate, the total computational power used to mine blocks, plummeted 50% to 58 exahashes per second (EH/s) and bitcoin was trading near $30,000.

The difficulty adjusts every 2,016 blocks to ensure that blocks continue to be mined at roughly 10-minute intervals. After the recent decline, the hashrate is now just under 700 EH/s, according to Glassnode veri. The largest cryptocurrency by market cap was trading recently around $105,300.

Significant hashrate and difficulty corrections are not unusual during the northern hemisphere’s summer. Elevated electricity prices, driven by higher air conditioning demand and strained power grids, often lead miners to temporarily shut off machines, especially older or less efficient ones. This seasonal pattern has been observed in several previous years.

The anticipated drop in mining difficulty will provide meaningful relief for miners. The hashprice, or miner revenue per exahash, currently sits at $51.9. This metric reflects the estimated daily income in dollars a miner earns per EH/s contributed to the network, based on block rewards and transaction fees.

As difficulty decreases, mining becomes easier, meaning miners can earn more revenue for the same amount of computational effort. Assuming bitcoin’s price and transaction fees remain stable or increase, the hashprice should rise significantly in the coming days, helping to offset recent profitability pressure.