The crypto news today shows that the mining difficulty of Bitcoin is set to adjust by 10% within every 3 days, meaning that a lot of operational costs for its miners could go up. Currently, the BTC price volatility is on the rise and further turbulences in the Bitcoin price are definitely expected.
Set for a minimum increase of 10% in the 3 days (as data from BTC.com shows), the cost to mine Bitcoin (BTC) will apparently increase significantly in a short period of time. The increase is significant as the increased operational cost to miners could pressure them to sell more BTC and offset the rise in expenses.
Currently, the Bitcoin network is divided into three groups that include developers, users, and miners. While developers maintain the prosperity of the protocol, users operate nodes to distribute information and miners use computing power to process data.
The BTC price volatility has been here for some time, especially after the block reward halving that Bitcoin went through last month. The Bitcoin news showed that the halving occurring on May 11 allowed miners to generate 1800 BTC per day. Post the halving, this figure dropped to 900 BTC per day.
FYI, when a halving happens, the expenses of miners increase by double. Since they can only mine half of the BTC which they used to mine, it is the same as seeing their revenues dropping by half overnight. Therefore, the current BTC price volatility is connected with all of this and even the hash rate is dropping.
Since fewer miners are operational, the difficulty to mine Bitcoin automatically adjusts by itself. The mining difficulty which occurred around 40 days ago caused the hash rate of the Bitcoin blockchain to go up as it made mining BTC cheaper than before.
But now that we have increased BTC price volatility and the mining difficulty increasing by more than 10%, the risk of miners selling more BTC relative to what they mine could also go up. If this happens, greater selling pressure will be placed on Bitcoin in the short to near term.
Currently, the price of Bitcoin is at $9,452 with a positive increase on the day.
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