Bitcoin Network Health Jumps as Mining Difficulty and Hash Rate Surge

Bitcoin, the world’s largest cryptocurrency, saw its mining difficulty increase by 1.5% on Thursday to reach 84.4 trillion. 

Mining difficulty measures how hard it is for miners to create new bitcoins. When more miners join the network, the difficulty goes up. This latest rise came as bitcoin’s hash rate, a measure of the total computing power used to mine bitcoin, climbed back above 605 exahashes per second (EH/s). 

The higher difficulty and hash rate follow a period where both had dropped. Bitcoin’s mining rewards were cut in half in April in an event called the “halving” that happens every four years. This caused some miners to shut down, lowering the hash rate. But now, bitcoin’s price has been rising, going above $70,000. This is giving miners more incentive to mine.

Bitcoin Network Activity Rebound Tied Directly to Ethereum ETF Hopes

Part of the reason for bitcoin’s price increase is growing optimism that the U.S. might soon approve a spot Ethereum ETF. 

An ETF, or exchange-traded fund, would make it easier for more people to invest in Ethereum, the second-largest cryptocurrency after bitcoin. The U.S. Securities and Exchange Commission (SEC) has to make a decision on some Ethereum ETF applications this week. If approved, this could boost crypto prices further.

As bitcoin’s price goes up, a metric called “hash price” is also recovering. Hash price estimates how much money a miner can make from their computing power. It hit an all-time low in April but has since rebounded to around $55 per petahash per second per day ($0.055 per terahash per second/day) per The Block data.

Overall, the Bitcoin network remains robust despite the challenges after the halving. The rising price and hash rate show that miners are still finding it profitable to secure the network and create new bitcoins. And if Ethereum ETFs get the green light, this could spur even more demand for Bitcoin and other cryptocurrencies.

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