Mining Difficulties and Hash Rate Surge Amid ETH ETF Hype

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Difficulty mining bitcoins has corrected up by almost 2%, reaching over 84.4 trillion, while the average network hash rate exceeded 600 EH/s.

This growth is due to growing optimism in the cryptocurrency market, in particular due to speculation about the potential approval of spot Ethereum ETFs in the United States. It is worth noting that Bitcoin mining difficulty measures how hard it is to find a hash below a given target.

The Bitcoin network has a global block difficulty that adjusts every 2,016 blocks (roughly every two weeks) to ensure that the time between block mining remains around 10 minutes, despite the number of miners and their increasing computing power.

This difficulty adjustment helps maintain regular network block times, ensuring stability and security.

Significant changes in bitcoin mining

The correction in BTC mining difficulty seen earlier this month marked a significant change as the metric saw a decline of almost 6%, the largest decline since the December 2022 bear market.

Bitcoin network hashrate. | Source: Hashrate Index

This rebound in hash rates from the 580-590 EH/s range to over 600 EH/s aligns with broader cryptocurrency market growth driven by expectations for regulatory advances in Ethereum products.

The concept of mining difficulty is crucial to understanding how Bitcoin self-regulates the production of recent blocks. The difficulty increases as more miners join the network, making it more hard to mine recent blocks.

Conversely, the difficulty decreases if the number of miners decreases, making mining easier. This mechanism ensures that the introduction of recent BTCs to the market remains constant and predictable, regardless of fluctuations in the number of miners.

This recent augment in mining difficulty coincides with a slight augment in the Bitcoin hash price, which dropped to an all-time low in overdue April.

Hash price, an indicator developed by Luxor, a Bitcoin mining services company, measures expected earnings per unit of hash rate per day. It has rebounded from less than $50 per PH/s per day to around $54.6 per PH/s per day, providing miners with some minor relief from the recent market downturn.

Bitcoin Price Index.
Bitcoin Price Index. | Source: Hashrate Index

Bitcoin price movements and future expectations

Although Bitcoin’s price has seen a slight decline of 2% in the last 24 hours, it maintains a weekly uptrend of 3.9% to reach a price of $68,132.

Bitcoin (BTC) price chart on TradingView
BTC price is moving sideways on the 2-hour chart. Source: BTC/USDT incl

The move is being closely watched as investors and traders await the U.S. Securities and Exchange Commission’s decision on Ethereum spot ETFs, which could significantly impact the overall cryptocurrency market.

In response to these events, a prominent analyst known as BitQuant common insights via social media platform X, predicting significant growth in Bitcoin. According to BitQuant, Bitcoin is expected to reach $95,000, with a significant augment to $80,000 predicted in May.

However, BitQuant is also forecasting a keen decline from this local peak in June, maintaining that the overall timeline for reaching this peak has not changed.

Featured image created with DALL·E, chart from TradingView


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