Mining Difficulty Reaches All-Time High As Price Of Bitcoin Surge Past $21,000

Mining Difficulty Reaches All-Time High As Price Of Bitcoin Surge

Total valuation of the global cryptocurrency market stands at $1.03 trillion with Bitcoin responsible for 39.38% of all trades in the last 24 hours. Bitcoin also made its biggest price gain in almost two years after crossing $21,000. 

The global cryptocurrency market continues its surge as Bitcoin (BTC) soared past $20,000 on Monday. As the surprise rally from last week held on, the world’s largest cryptocurrency with a market cap of $407 billion saw a trading volume of $25.9 billion on January 15. At the time of writing, BTC is trading at $21,155 – up by 1.7% in the last 24 hours. Bitcoin dominated almost 40% of the crypto market’s $61.9 billion trading volume on Sunday.

The entire market felt the brunt caused by the catastrophic collapse of FTX crypto exchange in November, which saw Bitcoin hovering around $17,000 for weeks before its biggest one week gain in almost two years. Many economists regarded the event as a nail to the coffin of cryptocurrencies and especially Bitcoin. But to the surprise and relief of investors, the token alongside the market has bounded back stronger than ever before. However, BTC is still trading 69.1% below the all-time high of $69,044 that it hit in November 2021. 

Ki Young Jun, an analyst at crypto analytics firm Crypto Quant says that the recent surge can be attributed to many big-players leaving the market for good. The bankruptcies of market markers including Sam Bankman-Fried’s FTX and Alameda Research, crypto lenders Celsius, BlockFi, Voyager Digital and Three Arrows Capital (3AC) in the last six months, left a large liquidity gap in the market that was taken advantage of by traders. Jun says the short-term squeeze made by traders to fill the hole left by market makers is a “temporary blip” rather than a broader return. He also added that markets are near to the bottom and expects the actual recovery to start before the second half of the year. 

Mining Difficulty Reaches All-Time High

At the same time, Bitcoin’s mining difficulty has risen to an all-time high (ATH), making it exceptionally difficult to mine BTC. On January 15, the Bitcoin network had a hashrate – computing power required to mine one BTC – of approximately 286.36 exahashes per second (EH/s) at block height 772,128 – the measurement of time needed to create a block and the distance of the entire network. After its latest two-week adjustment, mining difficulty currently stands at 37.73 trillion hashes, which is higher than all but one of the difficulty increases from the whole of last year. 

The new year started with the network’s hashrate reaching an all time high of 361.20 EH/s at block height 770,709 on January 6, surpassing the previous record of 347.16 EH/s set on November 12, 2022. Bitcoin prices climbing 23.2% in the past week is beneficial to miners, however, the 10.26% difficulty increase will make profits hard to come by. Mining pool concentration has also grown significantly over the week, with three pools commanding more than 60% of the global mining hash rate. According to statistics, Foundry USA is responsible for 35.9% of the global hashrate at 97.79 EH/s, followed by AntPool at 20.12% with 54.70 EH/s and Binance Pool at 11.59% with 31.49 EH/s. 

With an average hashrate of 268.9 EH/s, the current block interval time is around 8 minutes, 26 seconds. Bitcoin’s next difficulty adjustment is expected to occur on January 28, 2023. Out of the 21 million BTC that will ever exist, 19.2 million are currently in supply and only 1.7 million tokens are left to be mined. The approximate cost of mining Bitcoin is estimated to be $17,377 per BTC. 

Also Check: Samsung Asset Management Launches Bitcoin Futures ETF In Hong Kong

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