Bitcoin mining difficulty hits record high amid bullish predictions and upcoming halving event
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On Tuesday, Bitcoin‘s mining difficulty surged by 6.47% to a record 61.03T hashes per block, driven by the impending Bitcoin halving event, potential energy cost spikes, and global uncertainties impacting Bitcoin’s value and miner profitability. As miners ramp up their efforts in anticipation of the halving event that will cut block payouts from 6.25 to 3.125 BTC, concerns about network centralization have been amplified due to the consolidation of power by larger operations. To mitigate this, miners are forming pools to share resources and profits.
In response to these challenges, miners are maximizing returns before the halving event by investing in energy-efficient hardware like Application-Specific Integrated Circuits (ASICs) and optimizing energy usage. This increased difficulty could lead to further centralization of the Bitcoin network, triggering debates about its decentralization principles.
On Friday, Bitcoin’s mining hashrate hit a record high of 543 EH/s, indicating a secure network ahead of the April 2024 halving event. CoinMarketCap data shows Bitcoin trading above $34,000 with a week-on-week increase of 12% and a year-to-date gain exceeding 100%.
Bullish predictions are tied to the potential approval of a spot Bitcoin ETF by the US SEC. Financial analyst CryptoCon posted on Twitter forecasting Bitcoin reaching $45,000 in November.
Despite trading 50% below its all-time high, 80% of Bitcoin addresses are profitable at $34,000 according to Glassnode. A record 39.1 million addresses were in profit on Saturday, surpassing the November 2021 peak of 38.1 million, despite the FTX meltdown in December 2022 causing peak losses for over 20 million addresses. The total non-zero balance addresses have now reached 48.3 million, indicating a growing interest and participation in the Bitcoin network.
