27 Sep 2021
Bitcoin difficulty with its fifth consecutive upwards adjustmentAs miners are coming online again after being thrown out of China in the beginning of the summer, difficulty keeps increasing.
Last Tuesday, the bitcoin difficulty increased 3.2%. This was the fifth consecutive upwards difficulty adjustment, the longest streak since February 2020. Together, the previous five upwards adjustments have increased the difficulty by 39% since July 31st.The increases tell us that the hashrate has steadily recovered since it bottomed out at the beginning of July after China banned their enormous bitcoin mining sector from participating in the electricity market.Blockchain.com estimates that more than 50% of the hashrate went offline following the China mining exodus. The lower competition for block rewards has made mining extremely profitable for non-China based miners. These super-profits are encouraging miners to get hashrate online quickly.The subsequent difficulty adjustment is estimated to be on October 5th. It’s still too early to determine whether it will be a sixth consecutive upwards adjustment or if the streak will be broken.What is clear, though, is that the super-profits for bitcoin miners will not end unless the bitcoin price plummets since it takes time for new hashrate to come online, effectively limiting competition for block rewards.