According to on-chain data, the bitcoin mining difficulty soared to a new all-time high after climbing over 0.5% on Monday. The increase in difficulty came in the face of a sharp slump in Bitcoin’s price in the recent period, which was exacerbated following FTX’s demise.
Bitcoin Mining Difficulty Up Over 50% in 2022
Bitcoin mining difficulty climbed 0.51% today, hitting a new all-time high of 36.95 trillion. The latest jump takes BTC mining difficulty year-to-date gain to 51%.
The new record-high comes despite the steep decline in the world’s top cryptocurrency in recent weeks. Bitcoin currently trades just above the $16,000 mark, with its 2022 loss widening to over 66% following the recent collapse of FTX.
The crypto exchange earlier this month due to a liquidity crunch. Later reports revealed that the company borrowed $10 billion in user funds to cover the liabilities of its sister firm Alameda Research, which was at the center of FTX’s demise.
The implosion triggered a gigantic sell-off in crypto assets, with investors pulling out over 220,000 bitcoins from crypto exchanges in the week after FTX filed for bankruptcy. However, some believe that the full contagion impact is yet to come. Alesia Haas, CFO at Coinbase (NASDAQ:) Global said,
“What we are seeing now is a fallout of FTX is becoming much more like the 2008 financial crisis where it’s exposing poor credit practices and is exposing poor risk management.”
The crypto downturn was already strong enough as rampant inflation, and a flurry of jumbo interest hikes drove investors away from risk assets. US inflation eased to 7.7% in October, though recent retail data suggested that the Federal Reserve might not stop with aggressive rate hikes just yet.
Foundry USA Provides More than 27% of the Computational Power
Bitcoin mining difficulty depends on how much computing power is needed to mine bitcoin blocks in order to win BTC rewards. This metric changes about every two weeks, though it’s been on the rise for most of the year.
Data also showed that the mining pool Foundry USA currently offers over 27% of the computing power for the entire Blockchain network. This compares to just 11.5% in the same period last year.
Bitcoin hash rate, which measures the computational power used to mine and process transactions on Bitcoin’s network, is standing at 272.38M TH/s, according to ycharts.com. The hash rate has risen to new all-time highs several times this year.
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