Bitcoin’s mining difficulty has reached an all-time high of 95.67 trillion (T), marking a 3.9% increase, according to data from Glassnode. This significant jump in difficulty coincides with a record-breaking hashrate that surpassed 700 exahashes per second (EH/s) for the first time, signaling strong network activity and the potential onset of a new Bitcoin bull run.

Mining Difficulty Hits 95.67T: What It Means

Mining difficulty refers to how challenging it is for miners to add new blocks to the Bitcoin blockchain. The Bitcoin network adjusts difficulty every 2,016 blocks—or roughly every two weeks—to maintain a steady block production rate of one block every 10 minutes.

So far in 2024, 13 out of 22 difficulty adjustments have been positive, contributing to a 27% increase in difficulty since the beginning of the year, from 72T to 95.67T. This latest increase reflects growing network security and greater participation from miners deploying advanced equipment to remain competitive.

All-Time High Hashrate Signals Robust Network Health

The surge in difficulty mirrors a rise in the network’s hashrate, which crossed 700 EH/s for the first time. Hashrate measures the total computational power used by miners to validate transactions and secure the Bitcoin blockchain.

While a higher hashrate strengthens the network, it also places pressure on miners, as more powerful and efficient mining rigs are required to maintain profitability. As mining becomes more competitive, operational costs increase, leading to consolidation within the industry.

Weak Miners Exit the Market Post-Halving

Following the April 2024 halving, which reduced Bitcoin’s block rewards by 50%, smaller and less efficient miners have struggled to remain profitable. To cover costs, many of these weaker miners began selling their Bitcoin holdings, causing a notable decline in miner balances.

Between November 2023 and July 2024, over 30,000 BTC were moved out of miner wallets—one of the longest selling periods on record. As these smaller operations unplugged from the network or sold off their holdings, the hashrate temporarily dropped by 15%.

However, since July 2024, miner balances have stabilized, with signs of accumulation returning. This suggests that the remaining miners are better equipped to handle the increased difficulty and reduced rewards, leading to a consolidation of the industry into stronger players. Public mining companies now control nearly 30% of the network’s hashrate, a record high.

Miner Revenue and Bitcoin’s Bull Run

Bitcoin’s bull runs historically align with surging mining revenue, indicating a close correlation between price increases and the profitability of mining operations. Glassnode’s data shows that, since the halving, mining revenue has remained below the 365-day simple moving average (SMA), currently estimated at $40 million per day.

When total miner revenue surpasses the 365-SMA, Bitcoin tends to enter a bull market, as seen in previous cycles. Recent trends suggest that miner revenue is rising, hinting that the conditions for the next Bitcoin rally could be forming.

What’s Next for Bitcoin?

The increased difficulty and record hashrate point to a stronger, more resilient Bitcoin network, even as smaller miners are pushed out. With larger, more efficient players accumulating Bitcoin and the overall miner revenue on the rise, the market is showing signs of positive momentum.

Should miner revenue surpass the 365-day SMA threshold, it could trigger the next Bitcoin bull run, as higher prices and greater profitability attract more participants to the network. Additionally, public miners now control a significant portion of the network, adding further stability to Bitcoin’s mining ecosystem.

Source: Coindesk