bitcoin mining difficulty has seen a significant decrease, the largest drop seen in the last 18 months. This change is directly related to fluctuations in the network's hash rate, which has fallen below 600 EH/s after the recent halving event.
The adjustment, which represents a 5.7% drop in mining difficulty, places the level at 83.1 billion, according to data from Bitbó.
This more substantial adjustment from December 2022 reflects broader changes within the bitcoin mining landscape. At the time, the price of bitcoin was around $17,000, which is in stark contrast to current levels.
In particular, mining difficulty, a metric that determines how difficult it is to find a new block, is adjusted approximately every two weeks, or every 2,016 blocks. This system ensures that block discovery remains constant approximately every 10 minutes, regardless of the number of miners.
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Impact on miners and market dynamics
The recent decrease in mining difficulty came after a 10% drop in the bitcoin-network-hashrate” target=”_blank” rel=”nofollow”>network hash rate from a seven-day moving average of 639.58 EH/s to 581.74 EH/s.
This decrease in hash rate led to longer average block times of approximately 10 minutes and 36 seconds, compared to the standard 10 minutes, before the difficulty was adjusted downward to a block height of 842.688.
The hash rate reduction also contributed to a new low in the hash price, which bitcoin-hashprice-index” target=”_blank” rel=”nofollow”>fell at approximately $0.049 per TH/s per day.
This decrease affects the profitability of miners, since the hash price, a term introduced by bitcoin mining company Luxor, represents the profits a miner can expect per unit of hash power per day.
However, today's negative difficulty adjustment may provide some relief to miners, making it easier to mine blocks than in the previous two weeks.
The adjustments to mining difficulty and hash rate come as bitcoin price also shows signs of volatility. After peaking above $73,000 in March, the price has fallen 16% and is now trading around $61,376.
This decrease reflects the broader trend in mining difficulty, suggesting a possible correlation between these metrics.
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Additionally, the market has seen moderate activity in spot bitcoin exchange-traded funds (ETFs). btc-spot” target=”_blank” rel=”nofollow”>Data Soso Value indicates minimal net inflows or outflows, with Bitwise bitcoin ETF being the only issuer to experience inflows yesterday.
On May 8, total net bitcoin spot ETF inflows were $11.5409 million. Grayscale ETF GBTC has no entries or exits. Bitwise ETF BITB recorded a single-day net inflow of $11.5409 million. The total net asset value of bitcoin spot ETFs is $51.504 billion. https://t.co/OkjFkXsACa