[Bitcoin Now] Mining Difficulty Rises, Price Uptrend... Investor Sentiment Recovers

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Due to factors such as the increase in mining difficulty, the price of the representative cryptocurrency Bitcoin is showing an upward trend.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 11:42 AM on the 24th, the price of Bitcoin was $42,838 (approximately 52.24 million KRW), up 0.88% compared to the previous day.

As the hash rate rises, causing mining difficulty to increase, the price of Bitcoin is also rising. According to Blockchain.com, on the 23rd (local time), Bitcoin's hash rate recorded 208 exahashes per second (EH/s). The previous day recorded 206 EH/s. The hash rate refers to the computational processing power of the network involved in Bitcoin mining. When the hash rate increases, mining difficulty also rises. When difficulty increases, Bitcoin supply decreases, which can lead to a price increase.

Additionally, cryptocurrency specialized media CoinDesk reported, "Although sluggish at the beginning of the year, optimistic sentiment is returning to the cryptocurrency market," regarding the possibility of Bitcoin price increases. Justin Chu, a trader at investment advisory firm Wave Financial, said, "The upper limit of risk asset prices will be determined by the extent of the U.S. Federal Reserve's (Fed) interest rate hikes," adding, "As cryptocurrency prices stabilize, investors are releasing their downside hedges." Earlier, on the 16th of this month, the U.S. Fed raised the benchmark interest rate by 0.25 percentage points, after which Bitcoin prices rose by more than 4% due to the resolution of uncertainties.

Meanwhile, the digital asset Fear & Greed Index of Dunamu, the operator of the domestic cryptocurrency exchange Upbit, recorded 55.83, indicating a 'neutral' stage. Compared to 49.52 (neutral) on the 17th of this month, a week ago, it is 6.31 points higher. Dunamu's digital asset Fear & Greed Index is divided into stages of 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. The greed direction indicates increased interest in buying by market participants, whereas moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.