Key Points
- Bitcoin’s mining difficulty and hash rate has increased following a price increase, boosted by Ethereum ETF speculation.
- Ethereum’s potential ETF approvals in the United States have led to price increases across the crypto market.
Bitcoin’s mining difficulty increased by 1.5% to 84.4 trillion on Thursday, following a seven-day average hash rate increase above 600 EH/s.
The previous adjustment on May 9 saw a drop of 5.9%, the largest since December 2022. The impact of reduced miner subsidy rewards became evident after Bitcoin’s fourth halving event on April 20, despite an initial boost in transaction fee rewards.
Bitcoin’s Hash Rate and Mining Difficulty
After the drop, the hash rate remained relatively flat, ranging between 580-590 EH/s. The adjustment was initially expected to remain unchanged. However, the speculation of spot Ethereum exchange-traded funds (ETFs) approvals in the United States and subsequent crypto market price increases led to a jump in Bitcoin’s seven-day moving average hash rate to around 606 EH/s.
Bitcoin’s mining difficulty is a measure of the challenge in mining a new block compared to the easiest it can ever be. It adjusts approximately every two weeks to ensure a new block is found every 10 minutes, regardless of the number of active miners.
When the number of miners increases, the difficulty of mining bitcoin rises. Conversely, if the number of miners decreases, the protocol automatically lowers the mining difficulty.
Bitcoin’s Hash Price Recovery
Bitcoin’s hash price has also recovered slightly, reaching $55 per PH/s per day on Monday after sliding to an all-time low of less than $50 per PH/s per day on April 29. Hash price refers to the expected value of 1 PH/s or 1 TH/s of hashing power per day, quantifying how much a miner can expect to earn from a specific quantity of hash rate.
Bitcoin is currently traded at $69,736, a 5% increase this week. Meanwhile, ether is traded at $3,826, a 25% increase since Monday. This surge in price is attributed to the increased odds of spot Ethereum ETF approvals from 25% to 75%.
The Securities and Exchange Commission has final deadlines on Thursday and Friday to decide on the applications for spot Ethereum ETFs submitted by VanEck and Ark Invest. Other applicants include Hashdex, Invesco, Fidelity, BlackRock, Grayscale, Franklin Templeton, and Bitwise.
