Bitcoin Mining Difficulty Hits New All-Time High

Bitcoin’s mining difficulty surged by 4.68% in the latest adjustment over the weekend, setting a new all-time high.

Bitcoin Mining Difficulty (Gold) and BTC Price (Black) Fluctuations from Early 2020 to Present. Source: Glassnode

In the biweekly adjustment on January 29, Bitcoin’s mining difficulty increased by 4.68%, reaching a new ATH of 39.35 TH/s.

Mining difficulty is an automatic mechanism designed to adjust in response to fluctuations in the network’s hash rate (the computational power used for mining). As the hash rate has been hitting new highs recently, mining difficulty has also risen to ensure that the average block time on the Bitcoin network remains around 10 minutes per block.

Recent Bitcoin Mining Difficulty Adjustments. Source: BTC.com

Bitcoin’s mining difficulty has been on the rise continuously since September 2021, with the exception of adjustments in May-August 2022 (due to the crypto market liquidity crisis) and December 2022 (due to the fallout from the FTX collapse and several mining companies going bankrupt).

However, the network’s hash rate in the latest report stood at 305.81 EH/s, below the ATH of 348.7 EH/s set on January 6, 2023.

BTC's price also saw a significant recovery last month, increasing nearly 40% from $16,541 to $23,960, marking the best January in the past decade.

1D Chart of BTC/USDT on Binance as of 08:35 PM, January 30, 2023

Bitcoin Price Fluctuations by Month. Source: Coinglass

On Twitter, Binance CEO Changpeng Zhao shared statistics indicating that Bitcoin has followed a 4-year cycle since 2013, with notable downtrends in 2014, 2018, and 2022.