The Bitcoin network’s mining difficulty increased 14.7% Thursday, reversing recent margin relief for Bitcoin miners.
The upward adjustment forces operators to consume 14% more electricity to mine the exact same amount of Bitcoin. Hashprice, a measurement of how much revenue Bitcoin miners make, is now below $30 / PH / day, according to Hashrate Index.
Winter storms and grid curtailments previously pushed network difficulty down in January, which saw three consecutive negative difficulty adjustments. Hashrate dropped 20% earlier in February as Bitcoin traded below $80,000. North American winter storms forced miners like MARA (NASDAQ: MARA) to curtail operations.
This upward adjustment operates as a profitability cutoff for older-generation mining hardware. Less efficient miners and over-leveraged operators face an immediate return to operating losses. The network registered six negative difficulty adjustments out of the last seven periods before this current reversal.
Escalating Bitcoin difficulty signals higher competition in the mining industry, despite weaker Bitcoin price. Many Bitcoin miners have entered into AI/ HPC agreements to offset revenue, or have pivoted entirely.
It’s now without risks, however. AI/HPC requires high capital expenditure and long project lead times. Keefe, Bruyette & Woods recently downgraded Bitfarms (NASDAQ: BITF), Bitdeer (NASDAQ: BTDR), and HIVE (NASDAQ: HIVE) in January over execution risks related to these retrofits.
