Majority of miners move to Ethereum as Bitcoin mining difficulty reaches 5% ATH


The mining difficulty of Bitcoin (BTC) has reached an all-time high, reducing the already declining profit margins of miners.

New developments can be catastrophic for crypto miners. Additionally, the BTC price appears to be falling, which could lead to a storm for Bitcoin miners.

Bitcoin mining difficulty has risen dramatically, according to data from btc.com, a company that monitors BTC mining performance.

As noted cryptocurrency journalist Wu Blockchain revealed on Twitter, the cryptocurrency mining difficulty increased by about 5% to 31.25T.

This increase follows the approximately 5.6% increase two weeks ago when the difficulty of the network crossed the 29T zone for the first time ever.

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Bitcoin Mining Gets Harder

Bitcoin mining is the process of verifying and adding new transaction blocks (sets) to the blockchain. Difficulty measures how complex it is to compete for mining rewards.

Network users (known as validators or miners) participating in the mining process are rewarded with a fixed number of BTC for each transaction block they successfully verify and add to the blockchain.

Seven-day moving average. Source: Bitinfocharts.com

In contrast, the Bitcoin hashrate or the computing capacity of the network has hardly changed.

However, over the same two weeks, the profitability of Bitcoin mining declined by about 13%.

future risk

During this period, the Bitcoin price fell 23%. According to the Coiningecko chart, the price fell from around $39,390 on April 27 to its current level of $29,310.

According to analysts, Bitcoin mining companies are at serious risk if the cryptocurrency stays below $30,000 for an extended period of time.

However, the biggest fear is not the price of BTC falling below $30,000, but the decline period or the cryptocurrency will continue to decline.

According to data released by ByteTree, miners have spent significantly more of their newly generated BTC than they have held in the past few weeks.

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BTC total market cap at $568 billion on the daily chart | Source: TradingView.com

Switch to Ethereum for higher ROI

On the other hand, the majority of Bitcoin miners are now switching to Ethereum because of the higher return on investment, as the network suffers greatly as the Bitcoin mining difficulty increases.

Ethereum mining was more profitable when ETH broke the $4,000 resistance in 2021. Additionally, as the launch of ETH 2.0 approaches, the most sought-after crypto asset is becoming increasingly difficult to maintain a dominant position.

As these developments progress, more and more miners are migrating to the Ether network and avoiding unexpected crashes during transactions.

Featured image from Yahoo Finance, chart from TradingView.com

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