Bitcoin hash rate spikes as mining difficulty reaches 136.04T

Bitcoin’s mining power and network difficulty surged to highs this week, as market optimism for a bull rally grows ahead of US interest rate decisions to be made at the September 16-17 FOMC meeting.

According to data from Bitinfocharts, Bitcoin’s hash rate, the total computational power securing the network, reached 1.12 billion terahashes per second (TH/s) on Friday. The steep rise is one of the highest escalations in network activity since the onset of BTC mining.

Bitcoin difficulty chart. Source: Coinwarz

Mining difficulty has also simultaneously climbed to 136.04 trillion (T) at block 914,374. Difficulty measures how hard it is for miners to solve the cryptographic puzzles that allow new blocks to be added to the chain. The metric adjusts every 2,016 blocks, roughly every two weeks, in line with the pace of mining.

Over the past seven days, Bitcoin’s difficulty has recorded little to no changes, but in the last month, it rose 5.10%. Over 90 days, it is up 7.62%, per recent data from Coinwarz.

Next difficulty adjustment in sight, another increase imminent

The next difficulty adjustment is scheduled for September 18, according to CoinWarz projections, which put the increase at 6.38%, pushing the figure to 144.72T. 

As of today, it would take 5,548.8 days to mine a single Bitcoin under prevailing conditions, assuming a hashrate of 390.00 TH/s, power consumption of 7,215 watts, electricity costs of $0.05 per kilowatt-hour, and the current block reward of 3.125 BTC.

Varun Satyam, co-founder of decentralized finance platform Davos Protocol, said in an interview on Friday that such conditions often force “smaller or inefficient miners to scale back, while larger, efficient operators hold or even accumulate, preparing for the rally to recover their capex.”

Satyam also mentioned that hash rate spikes after halving events have historically preceded Bitcoin price bull charges. He propounded that a slump in selling pressure from miners, mainly due to BTC’s current pricing at $115,000, combined with a supportive macroeconomic backdrop, could clear a route for Bitcoin’s upward momentum.

The US Federal Reserve is set to announce its latest interest rate decision on September 17. Markets expect a 25 basis point cut as CPI and job data show a slowdown in the US economy, more reason for softness.

Miners turn to accumulators

Bitcoin miner reserves hit a 50-day high of 1.808 million BTC on September 9, according to CryptoQuant. The uptick could mean that miners are choosing to hold rather than sell their holdings.

Analyst and contributor Arab Chain reported that transfers of Bitcoin from miners to exchanges have tanked since the start of September, with cumulative deposits nearing 56,000 BTC. The drop points to miners favoring over-the-counter (OTC) trades for large transactions or simply retaining coins in reserves.

This contradicts the occurrences of previous market cycles when miners tended to liquidate aggressively ahead of halving events or late-stage bull markets. Historically, spikes in the Miners’ Position Index (MPI) signaled these waves of selling pressure.

Now, with institutional adoption growing and US spot Bitcoin exchange-traded funds (ETFs) established, miners appear more willing to accumulate and ride market cycles, bearish or favourable. 

Yet, the increasing cost of mining squeezes operators working with thin profit margins in fear that only the largest firms with access to cheap energy and capital will be competitive.

Alongside miners, the so-called “sharks” wallets holding between 100 and 1,000 BTC absorbed 65,000 BTC in the past week alone. Their total holdings now stand at a record 3.65 million BTC, even as the price consolidated near $112,000.

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