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Bitcoin Miners Yet to See Relief as Mining Difficulty Rises to a New Peak

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In the latest Bitcoin mining tweak observed on Monday (October 10th), the network’s mining difficulty peaked at a theoretical complexity figure of 35.61 trillion.new Difficulty diagram represents a 13.55% increase from Sept. 28, marking the most significant adjustment miners have overcome to solve valid blocks since May 2021.

The seven-day average hash rate peaked at 266,583,000 terahashes per second (TH/s) on October 12, according to data from Blockchain.com. – Almost double the figure at this point in October last year (143.35 million TH/s).

this consistent uptrend As far back as August, we see Bitcoin network builders unfazed by bear markets and struggling prices. Scilling Digital Mining CEO Mark Morton said of the current situation: “Very positive [network’s] safety,” Especially during bear market cycles.

The worst is not over yet for miners

From an institutional perspective, the adjustment bodes ill for mining companies and those investing in the niche in general. Most of them have already been operating in nearly intolerable conditions for the better part of this year.

“The next difficulty adjustment suggests that miners are still finding profit margins sufficient to launch new machines, likely taking advantage of plummeting machine prices. ” Morton said on the matter.

Weak Bitcoin (BTC) prices, an overwhelmingly bearish environment, and rising energy costs have made profits thin or non-existent. US electricity prices rose 15.8% year-on-year in August, with September figures showing a 15.97% increase.Indeed, some Mining companies are revenue constrainedthose who failed to plan for such extreme outcomes or who misappropriated their funds could bear the brunt of this adverse situation.

“Miners, who we assumed would have an up-only market and buy machines at high prices, would certainly be feeling the pinch.” A Scilling Digital Mining executive said:

More miners joining the network, but fewer selling their stash

The recent skyrocketing difficulties have run counter to easing pressure on the BTC price. Glassnode’s Week Onchain newsletter published on October 3, report Miners slashed their sales peddler, Coin sales by miners dropped by 50% in the 30 days ending in early September. The majority of this sales activity was attributed to miners associated with the troubled bitcoin mining pool Poolin, analysts at the company providing market intelligence and insights said.

Luxor Technologies Introduces OTC Bitcoin Mining Derivatives

In other news, blockchain infrastructure company Luxor announced earlier this week that launch Over the Counter (OTC) Undeliverable Forward Contract for Bitcoin Mining HashPrice. Luxor defines hash price as: “Bitcoin mining revenue miners earn from units of hashrate (i.e. computational power) in a specific time frame.” This new derivative product allows contract buyers to participate in potential Bitcoin mining upsides and contract sellers to lock in Bitcoin mining earnings without physical exposure.

The Seattle-based computing power company tracks hashrate values ​​via the Bitcoin HashPrice Index and pays contracts in US dollars by default, but with an option in Bitcoin. The company’s head of derivatives, Matt Williams, said the Hashprice NDF product will help miners hedge their businesses while also providing trading and investment firms. synthesis Exposure to Bitcoin mining.

“While there are many derivative products for miners to hedge their bitcoin price exposure, power and energy exposure, the space has not had one to easily hedge their hash rate exposure.”

Luxor plans to roll out other hashrate derivative products later this year. Last week, Argo raised $27 million to ease liquidity pressure. Peter Wall, the CEO of the London-based miner, said the company is in a “cash-short” situation as profitability is being squeezed by high energy prices and low bitcoin prices. Did.

Marathon Digital recently clearly Over $80 million exposure on Compute North. The Nasdaq-listed crypto miner’s bankruptcy data center exposure includes $10 million of convertible preferred stock in the bankrupt entity.

Bitcoin (BTC) Price

Bitcoin was spotted hovering at $19,187 when it went public, down 3.26% over the past 24 hours. If the BTC price drops below his $18,000 mark, it will put pressure on miners as well as owners, possibly resorting to extreme measures such as mergers and acquisitions. Last month, Bitdeer set him $250 million specifically to target this angle.

BTC/USD 7-day chart

Given that Bitcoin is trading just above $19,000, its price has shown some resilience recently, giving us a positive outlook related to this surprising relative strength. Glassnode analysts theorized in the week. 41s (October 10) version Bitcoin investors may be setting a bear market based on several on-chain indicators, market structure, and overall investor behavior patterns, according to the weekly on-chain newsletter.

The biggest uncertainty is how much bitcoin is held back before it hits a recovery course. became. This bodes well for innovation.

For more information, Investing in Bitcoin guide.

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