Last April, the Bitcoin industry experienced a significant moment with the halving. Block mining was directly affected, but in recent months, a significant trend change has been observed that has brought great relief to small miners. A change that increased profitability, mostly lost with the halving.

Mining difficulty is returning to pre-halving levels. According to data from Coinwarz, mining difficulty has dropped to levels not seen since March, when the fourth halving had not yet occurred and the double reward increased from 6.25 BTC to 3.125 BTC.

On June 5, mining difficulty dropped precipitously by 7.8%, from 83.6 terahashes per second (TH/s) to 79.50 TH/s. A drop large enough to turn around and restore hope for miners.

With the collapse of FTX, there has been almost no 10% decline since 2022. This latest drop in mining difficulty is unusual. According to CryptoQuant analyst Julio Moreno, it is the biggest drop in hash rate since December 2022, which coincided with the FTX crash.

A relief after the panic of May. The profitability of Bitcoin mining has plummeted after the halving, with daily revenues previously around $78 million, now around $26 million.

This rapid decline in mining difficulty is being encouraged precisely because it’s no longer that profitable. “As profitability has decreased, many miners have decided to shut down their equipment,” Moreno says.

Less miners, less difficulty. Since the hash rate is too high and the profitability is too low, many miners have decided to quit mining Bitcoin. This rapid decline is a sign that the pressure is too high and the situation is delicate. Now that there are fewer miners, those left behind will benefit.

I expect technology to develop for Bitcoin to rise. The problem is that while this difficulty has decreased, it is still too high. Only a few Bitcoin mining machines are efficient enough to be profitable. Machines with a 3,500W consumption, such as the Bitmain S21, have long been sold out.

Bitcoin is below $60,000. Although the expectation is that the price will rise, the situation such as the sell-off from Germany or the pressure on the profitability of mining raises many doubts about the sector. The hope is that mining machines will become cheaper and more efficient and profitability will increase again.

Image | Kanchanara

On Xataka | There’s a deadline to ensure Bitcoin mining sustainability: the next ‘halving’