- There is growing pressure on Bitcoin miners to “double down” on BTC or diversify.
Even if the price of bitcoin has recently dropped, mining difficulty is still a very amazing statistic. According to data from BTC.com, the difficulty of Bitcoin hit a new all-time high on Wednesday at 90.67 trillion hashes.
As part of the process of safeguarding the blockchain, Bitcoin miners execute a mathematical operation called hashing. The amount of computer power and energy required to complete the task increases with difficulty.
According to Nishant Sharma, the founder of BlocksBridge Consulting, a communications and research company for the bitcoin mining sector, the record-high difficulty has drastically lowered profitability for publicly traded mining companies.
He claims that [the difficulty level] is forcing people to diversify into other income streams or double down on Bitcoin in the expectation of a bull market.
According to Sharma, those who are diversifying are repurposing their mining infrastructure for AI and other [high-performance computing] applications. Those who are doubling down, on the other hand, are hoarding or purchasing additional Bitcoin, imitating MicroStrategy, which functions as a virtual Bitcoin ETF.
Large enterprises known as bitcoin miners use enormous warehouses full of computers to process new transactions and maintain the network. With Bitcoin, miners receive rewards for each block they process. However, with mining difficulties at an all-time high, they must put in more effort to remain in business. Because the procedure has grown so costly, some miners are actually being forced to close up shop completely.
The Bitcoin network experienced an event known as the halving in April. Every four years, an upgrade is released that reduces miner incentives from 6.25 BTC to 3.125 BTC for each block they process.
Naturally, the event makes miners work harder, so in the end, only the industry’s most productive businesses continue to compete to maintain the network.
The price of bitcoin is at $63,188, down more than 6% over the last seven days. In March, the asset reached a new all-time high of $73,737.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
