Bitcoin Mining Difficulty Increased at Historical Rate- Cryptocurrency Impacted by FED Rate Hikes

Bitcoin Mining Difficulty Increased at Historical Rate- Cryptocurrency Impacted by FED Rate Hikes

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https://cointelegraph.com/news/not-a-minor-adjustment-bitcoin-mining-difficulty-soars-13-5-to-new-ath

In what is an historical surge by 13.5%, the mining difficulty increased for Bitcoin blocks. Investors and miners have endured a brutal crypto winter, with Bitcoin below $20,000 and this is a good sign for the market as a whole.

The mining difficulty increase followed a hash-rate surge, which signals the rise in Bitcoin's price.

Bitcoin remains below $20,000 but the increase in mining difficulty shows that mining Bitcoin is still profitable. The cost of ASICS and mining GPUs has fallen with the cryptocurrency market cap during "crypto winter". Demand crashed and more companies were able to purchase equipment to mine Bitcoin, leading to a surge in hash-rate and a following increase in demand.

Bitcoin's mining difficulty is adjusted approximately every two weeks, and is a measure of how difficult it is to mine a block. It is correlated with total hash rate, which is the total mining power used to mine Bitcoin, which helps secure the blockchain of Bitcoin. An explanation of these terms and a Bitcoin mining difficulty chart can be found at the link below:

https://www.blockchain.com/charts/difficulty

Bitcoin's hash-rate has been an historical indicator of demand and spikes before Bitcoin's price does. Total has rate increases means the amount of mining rigs being used to mine Bitcoin has increased, and a price increase is anticipated. Miners will often hold onto Bitcoin as the price rises to capitalize on the asset and buy even more mining rigs. The supply of Bitcoin decreases as mining difficulty increases, which drives demand as well.

Bitcoin and the cryptocurrency market have followed the stock market, which has largely been driven by the FED's interest rate and monetary supply policies. What we have seen is an interest rate increase that has slammed the stock and cryptocurrency markets. This market decline has impacted the price of mining hardware, which has in turn increased the ability of beleaguered cryptocurrency-mining firms to buy even more mining rigs. This is essential a mechanical rebalancing of the markets.

Expect to see Bitcoin's price react. Miners may hold onto Bitcoin and sell as the price rises, which will decrease the overall hash-rate and the Bitcoin mining difficulty, as has historically happened.