On July 14th, Bitcoin’s hashrate slowly climbed back up between values of 85 exahash per second (EH/s) and 125 EH/s. Due to this increase in hash power, it means that the next difficulty change in bitcoin mining will take place for the first time in the last eight weeks. Previously, the cryptocurrency had seen four consecutive drops in difficulty, which turned out to be the largest in Bitcoin’s entire life and they will now come to an end within a few days. The price of the pioneer cryptocurrency dropped for a couple of weeks in succession.
During the same time period, China was also cracking down against Bitcoin miners in the country. Bitcoin’s price started sliding from just above the $50,000 mark on May 15th to reach just about the $30,000 threshold on May 19th. A drop in price essentially takes away the revenue from Bitcoin miners and when BTC started dropping on May 15th, the mining difficulty had gone up two days before. It was 21.53% higher than the previous adjustment. The next two weeks turned out to be very grueling for miners because it was 21% more difficult for them to mine a block.
Furthermore, the action of the Chinese government that involved cracking down on Bitcoin miners in various provinces and banning it completely in particular areas also had an impact. Miners were taken completely by surprise when they were told to close their facilities by a particular date. Before June 9th and two small drops to 137 EH/s, the difficulty had been 21% higher and the hashrate also managed to stay above 150 EH/s. However, Chinese bitcoin miners were severely affected by the government’s actions on June 28th and the hashrate came down to 66 EH/s. Fortunately, May 29th saw the first downward difficulty adjustment, when it reduced to 15.97%.
The price of Bitcoin continued to decline, making it tougher for minors to profit. This resulted in three more drops in difficulty, which benefitted the entities that help keep the blockchain secure. It became 54% easier for people to find Bitcoin blocks in the last two weeks, thanks to all four of the downward difficulty drops. This is a significant low as opposed to the height of difficulty before May 13th. But, these consecutive downward adjustments are expected to change in the next few days and an increase between 3% and 5% is expected.
Even if it does happen, it would still be 50% easier for miners to find BTC blocks than it had been before mid-May 2021. But, it all depends on what happens to the hashrate in the next couple of days. If the hashrate goes up significantly then there could be an increase in difficulty by more than 5%. If the global hash power goes down significantly, the expected increase could be nullified and may lead to another decrease. Considering the current hashrate, a fall in the difficulty of 3% to 5% is expected, which shouldn’t be too difficult for miners to manage.