[Bitcoin Now] Mining Difficulty Rises... Divergent Trend from Price Movement

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The Bitcoin hashrate is continuously increasing. The hashrate refers to the network computational power used for cryptocurrency mining, and the higher the value, the greater the difficulty. In the case of Bitcoin, the system is designed so that the value increases as more miners participate.

According to cryptocurrency mining information site CoinWarz on the 22nd, the Bitcoin hashrate recorded 251.77 exahashes (EH/s) on the 21st (local time). Compared to 231.73 exahashes the previous day, this is an 8.65% increase. The Bitcoin hashrate has been on a daily upward trend, rising 20.68% compared to 208.62 exahashes on January 1 of this year.

Although the Bitcoin mining difficulty is rising like this, the Bitcoin price is moving in the opposite direction. When Bitcoin mining difficulty increases, supply decreases accordingly. A decrease in supply usually leads to a price increase, but recently Bitcoin prices seem to be influenced more by other factors. Bitcoin prices have fluctuated due to influences such as the U.S. benchmark interest rate, the Nasdaq index focused on tech stocks, and the conflict between Russia and Ukraine.

According to cryptocurrency market tracking site CoinGecko, as of 11 a.m. on the same day, the Bitcoin price was $40,541 (approximately 50.37 million KRW), down 2.8% from the previous day. The price showed an upward trend after Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), suggested that the Federal Open Market Committee (FOMC) might raise the benchmark interest rate by 0.5 percentage points at once next month.

Meanwhile, Bitcoin’s scarcity is also increasing day by day. Bitcoin issuance is limited to 21 million coins, and according to CoinGecko, 90.56%, or 19,018,381 coins, have been circulated and listed so far. Earlier on the 1st of this month, cryptocurrency mining company SBI Crypto succeeded in mining the 19 millionth Bitcoin. SBI Crypto reportedly earned 6.25 Bitcoins from that mining. The industry expects that if the current mining methods and pace are maintained, all mining will be completed by 2140.