BITCOIN MINING DIFFICULTY ADJUSTMENT

Bitcoin hashrate bounces after a significant drop; miners expectant on price action

Analyzing Bitcoin’s difficulty adjustment and mining profitability

The latest difficulty adjustment, effective at block height 768,096, increased mining difficulty by 3.27%. In this overview, we’ll analyze the effects on mining and profitability.

Bitcoin’s total hashrate

After a considerable drop throughout the previous mining epoch, hashrate managed to bounce back to an average 253.07 EH/s by the time of the adjustment.

However, throughout the last two weeks, Bitcoin’s total hashrate has been inconsistent.

This volatility could be mirrored in Bitcoin’s price action, first jumping above $18K — encouraging miners to fire up their ASICs — and then dropping suddenly below $16.8K.

Bitcoin’s mining difficulty

With hashrate growing during the last stretch of the epoch, difficulty increased to 35.36T, undoing almost half the drop it went through in the last adjustment.

The increase in difficulty reopens the question of miner capitulation. While it seemed to have already happened after the last adjustment’s 7% difficulty drop, this 3% bounce signals that there are many miners waiting on the sidelines to resume operations as soon as their profit margins become thicker.

Hashprice, or mining revenue per TH/s

Looks like it’s going to be a tough epoch with difficulty increasing and Bitcoin struggling to reclaim $17K.

For the time being, miner revenue per TH/s — also known as hashprice — has dropped to a round $0.06, dropping 6.25% from the $0.064 it had reached after the last difficulty adjustment.

The good news is that miner revenue is still hovering above all-time lows, when all the previous increasing difficulty adjustments drove it to touch a new minimum. Hopefully, it won’t come to that this time.

Bitcoin mining profitability overview

The relief that came after the last adjustment was short lived. Now, it’s back to damage control and optimizing for profitability.

Miners are keeping an eye on price action hoping for a recovery that can bring back the profitability increase they’ve enjoyed during the last epoch.

Nevertheless, this hashrate recovery and difficulty change has signaled that there are still many miners waiting on the sidelines, ready to fire up their ASICs as soon as the margins are worth it.

The difficulty adjustment in numbers

• Difficulty adjustment block height: 768,096
• Date of the adjustment: 12/19/2022
• Average hashrate at the time of the adjustment: 253.07 EH/s
• Previous difficulty: 34.24T
• Current difficulty: 35.36 T
• Difficulty change: +3.27%
• Miner revenue per TH/s (hashprice) after adjustment: $0.06