As the crypto market grapples with larger macroeconomic trends, the last week continued the up-and-down movement. However, one of the key developments the crypto world noticed was a jump in the Bitcoin mining difficulty.
It’s generally a good sign when bitcoin mining becomes difficult because it means more miners have to verify cryptocurrency transactions, enhancing the network’s security. These jumps tend to have an impact on the price of Bitcoin, and it also provides some indication as to where the asset may be heading in the short term.
Key Takeaways
- Bitcoin’s mining difficulty has increased by 9% to 30.97 trillion.
- The jump is the highest that Bitcoin has experienced since May 2022.
- An increase in mining difficulty suggests more miners are coming onboard, which is a good sign.
Bitcoin Mining Difficulty Up By 9%
Bitcoin’s mining difficulty has increased by 9% over the past week and currently stands at 30.97 trillion. An increase in mining difficulty means that miners must put in more computing power in order to mine a block. It also points to the participation of more miners, as the mining process becomes more computationally demanding as more come on board.
While miners may have to put in more effort, a higher mining difficulty also means that the network is more secure. Furthermore, more miners joining the effort means that the network is growing — which is good for Bitcoin’s price in the long run.
Bitcoin’s mining difficulty is automatically adjusted roughly every two weeks in order to keep the total block time at 10 minutes. The next difficulty adjustment will take place on September 14.
The 9% jump makes the mining difficulty the highest that Bitcoin has experienced since May 2022. The price of the asset isn’t necessarily correlated with the mining difficulty, as there have been occasions where the price has remained within a small range. On other occasions, it has been accompanied by a noticeable drop or increase in Bitcoin’s price.
Short-Term Bitcoin Price Is Somewhat Unpredictable
As of this writing, Bitcoin is trading below $20,000, and it’s in the red. The market could be in the midst of an extended period of stagnancy as several developments unfold. The tightening fiscal policies of the United States Federal Reserve looms large, while inevitable regulatory changes also threaten to impact the market in the short term. In the long run, however, an increase in mining difficulty will provide some legitimacy to the market. Therefore, Investors can take some comfort in the fact that more miners may be hopping on board, growing the network, and setting it up for a better future.