Bitcoin Mining Gets More Competitive As Hashrate Hits New ATH: CryptoQuant

With the value of BTC nearing its all-time high of $73,700 a few days ago, Bitcoiners seemed poised to see a new price high for their favorite crypto asset.

Even Bitcoin miners are not left out of the anticipation. A CryptoQuant report confirms that the network’s mining difficulty and hash rate have unlocked new heights. This record shows that more mining machines have joined the bandwagon, causing competition in the ecosystem.

Bitcoin mining competition is on the rise

Bitcoin adopts a proof-of-work (PoW) consensus mechanism linked to mining activities to add transactions to the blockchain. Mining difficulty and hash rate are vital to ensure network stability while producing new BTC.

As more miners start Bitcoin mining operations or existing facilities increase their mining capacity, the mining difficulty and hash rate of the network increase. Conversely, a reduction in mining machines leads to a decrease in mining difficulty and hash rate.

Highlighting how the latest increase in the two metrics will affect mining operations, the CryptoQuant report stated:

As the difficulty increases, more computational power is required to process transactions, increasing mining costs. With the value of Bitcoin on the rise, mining competition has intensified, posing challenges for the industry.

This shows that Bitcoin miners will struggle to compete against bigger players in the market unless they raise cash to increase their mining capacity. The continued competition within the mining ecosystem may partly explain miners’ policy of hoarding and holding BTC, a practice that some believe will drive the price of the asset to higher heights.

How are Bitcoin miners doing?

With the latest increase in competition in the Bitcoin mining business, several miners have explored acquisitions and various strategies to stay afloat.

Last month, Bitcoin miner TeraWulf sold a 25% stake in a joint venture, raising $92 million to fuel its mining operations. In other news, Bitcoin miner BitFuFu acquired a rival mining facility based in Ethiopia, helping to increase the company’s mining capacity by 80MW.

Another Bitcoin mining company, Northern Data, revealed its plan to shut down its mining business to focus on artificial intelligence (AI).

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