Bitcoin Mining Difficulty Exceeds 100T for the First Time, Miners Under Pressure

Bitcoin’s (BTC) mining difficulty reached an all-time high of 101.65 trillion (T) as of yesterday, increasing the pressure on smaller miners who don’t have as much cash as their publicly traded rivals to keep their rigs going.

Mining difficulty measures how difficult it is to discover new blocks in the Bitcoin blockchain. The network automatically adjusts every 2,016 blocks, or roughly every two weeks. This year the difficulty has been adjusted 23 times, with almost 60% of the adjustments positioned to make the process harder.

Because mining is a highly competitive and capital-intensive industry, small or private companies whose access to cash may be more limited than their publicly traded competitors may need to sell their bitcoins to fund operations.

Bitcoin’s hash rate hit a record high last week with a seven-day moving average of 755 EH/s. Hash rate is the computing power required to perform transactions on a proof-of-work blockchain. According to Glassnode data, at the end of October, the hash rate increased by almost 12 percent in one day, one of the largest increases since the beginning of the year.

On average, miners spend 100% of the total mined supply. Although miners reportedly held on to some of their bitcoin in October, they added assets to treasury reserves after a massive depletion in August and September.

Under current conditions, miners mine an average of 450 bitcoins per day. If all of these are sold, there could be roughly $31.5 million in sales pressure.

These numbers overall show that miners are in a relatively healthy place right now. The less they spend on issued supply, the less sell-side pressure there will be.