• Bitcoin’s mining difficulty fell 3.6% at 3:49 a.m. UTC on Jan. 3.
• The difficulty change suggests that a fraction of Bitcoin (BTC) miners withdrew from the network — most likely due to reduced mining profitability.
• Bitcoin’s overall mining hash rate fell temporarily to 156.46M on Dec. 24, 2022, from 232.05M on Dec. 23, 2022, according to YCharts.
On January 3rd at 3:49 a.m. UTC, Bitcoin’s mining difficulty fell 3.6%, according to the latest data from Bitrawr. This decrease suggests that a fraction of Bitcoin (BTC) miners withdrew from the network due to reduced mining profitability, which likely has to do with the winter energy curtailments that occurred in the United States.
The winter energy curtailments involved higher winter electricity prices and power outages. As a result, miners faced increased electrical costs and, in some cases, restricted access to energy. This is reflected in the data from YCharts, which showed that Bitcoin’s overall mining hash rate fell temporarily to 156.46M on Dec. 24, 2022, from 232.05M on Dec. 23, 2022.
The fluctuations in the price of BTC are unlikely to be the reason behind this most recent adjustment. Despite this year’s market crash, BTC price remained steady since the blockchain’s last difficulty adjustment two weeks ago. The price of BTC is down 0.7% over the last seven days and 3.64% over the past 30 days.
It is clear that the energy curtailments have had an impact on Bitcoin miners, with some miners having to withdraw from the network due to reduced mining profitability. This has resulted in a decrease in Bitcoin’s mining difficulty, which could continue to fall if miners are unable to find a way to keep up with the rising costs of mining. It remains to be seen how miners will cope with the current situation and if the mining difficulty will continue to drop.