BTC mining difficulty jumps 6% to a new high, hash rate indicates high confidence

BTC mining difficulty rises by 6% to a record high, indicating strong confidence in hash rate.

Author: WILLIAM SUBERG, COINTELEGRAPH; Translation: Song Xue, LianGuai

The fundamentals of the Bitcoin network did not follow the bearish trend of BTC price this week.

The latest on-chain data confirms that Bitcoin mining difficulty has reached a new all-time high, followed closely by hash rate.

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Despite a 10% drop in Bitcoin/USD last week, Bitcoin miners seem to be unfazed by the price decline.

This was solidified in the network activity on August 22, with the latest bi-weekly automatic difficulty adjustment increasing by 6.17%.

Data from BTC.com shows that this not only pushed the difficulty to a new all-time high but also marked the 6th largest increase in Bitcoin difficulty in 2023.

Mining difficulty reflects miner competition and the security of the Bitcoin network, and its upward trajectory indicates that miners have not yet fallen into profitability difficulties.

The next automatic adjustment is expected to continue this trend, with mining difficulty surpassing 5.6 trillion for the first time.

Overview of Bitcoin network fundamentals (screenshot). Source: BTC.com

Hash rate demonstrates “high confidence” in Bitcoin

A similar story involves hash rate.

Although it cannot be measured accurately, the hash rate has challenged existing historical highs of over 400 exahashes (EH/s).

MAC_D, a contributor to the on-chain analysis platform CryptoQuant, mentioned in response to this data that network participants have a “high degree of trust in the security and reliability of Bitcoin and Ethereum.”

“Recently, the prices of BTC and ETH have dropped by 10%. However, the security and reliability of the network have improved. Firstly, the BTC hash rate (SMA 14) showed higher numbers during the decline, indicating that miners are more active in mining BTC. Secondly, the ETH staking rate (%) indicates that despite the price drop, more ETH is being staked,” he wrote in the August 22 Quicktake market update.

“This means that investors have full confidence in the security and reliability of the BTC and ETH networks. Despite the increase in the intrinsic value of both assets, the prices have fallen, indicating that they are undervalued, and now may be a good time to actively accumulate assets.”

Bitcoin estimated hash rate chart. Source: Glassnode

Meanwhile, separate data from on-chain analysis company Glassnode shows that the amount of BTC held by mining entities has hardly changed.

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As of August 22nd, the number of Bitcoins is slightly over 1.83 million, with a stable growth of 0.08% since the beginning of this month.

Bitcoin miner BTC balance chart. Source: Glassnode

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