New records continue to be set in the bitcoin (BTC) ecosystem, which has seen the mining difficulty adjustment rise to a new all-time high of 110.45T (trillion).
The difficulty adjustment, which recalibrates every 2,016 blocks, ensures that blocks are mined on average every 10 minutes. This recent adjustment marks the eighth consecutive positive change in difficulty, creating increased pressure on miners as the industry becomes increasingly competitive and more challenging to mine bitcoin effectively.
In light of these developments, some publicly traded miners have pivoted to the high-performance computing (HPC) and artificial intelligence (AI) sectors, recognizing that relying solely on bitcoin mining is no longer sustainable. For instance, MARA Holdings (MARA) has taken innovative steps such as issuing convertible bonds to acquire more bitcoin and optimizing their revenue streams by lending out their bitcoin holdings to secure single digit yield.
This is not the first instance of consecutive positive difficulty adjustments; we witnessed a similar trend during the summer of 2021, shortly after the China mining ban, which resulted in a dramatic 50% drop in hashrate. Between July and November 2021, bitcoin experienced nine consecutive positive adjustments, coinciding with the bull market peak when the cryptocurrency reached approximately $69,000. Subsequently, 2022 saw bitcoin enter a bear market that persisted throughout the year, with the last positive adjustment marking the bull market’s summit.
The previous cycle also provides further insight; during December 2017, bitcoin recorded 17 positive adjustments, capturing the bull market zenith around $20,000. Following a minor negative adjustment in July 2018, when the price hovered around $6,000, the network continued with six more consecutive positive adjustments before entering a phase marked by multiple negative adjustments towards Q4 2018, ultimately finding its lowest point at around $3,000.
While no definitive trends emerge from these patterns of consecutive positive adjustments, they have been historically linked to significant market tops and bottoms. Currently, it is crucial to acknowledge the robust strength of the bitcoin network, with a 7-day moving average hashrate reaching 775 EH/s. According to CoinDesk research, the hashrate could very well hit the formidable milestone of 1 zettahash per second before the next halving takes place.
