Bitcoin mining difficulty drops 11% in largest negative adjustment since China’s 2021 ban

Bitcoin mining difficulty recently experienced a dramatic downward revision, falling by approximately 11%. This adjustment, which occurred during the latest two-week cycle, marks the most significant negative correction since July 2021, following China’s comprehensive crackdown on the sector.

The difficulty adjustment is an automated process designed to ensure that new Bitcoin blocks are found consistently, roughly every 10 minutes, regardless of how much computing power (hashrate) is dedicated to the network. The recent sharp decline is a direct response to a major exodus of computing power from the network. This indicates that the global hashrate has dropped substantially as unprofitable miners shut down operations.

Analysts attribute the substantial hashrate drop primarily to the enduring financial pressures of the Bitcoin Halving, which occurred in April. By instantaneously slashing miner rewards by 50%, the Halving rendered older, less efficient mining hardware unprofitable, especially when combined with high operational energy costs. Furthermore, rising summer temperatures in key mining regions, notably the United States, likely forced operators to throttle or temporarily shut down facilities to manage energy consumption and equipment heat.

This 11% drop indicates a period of temporary capitulation among less resilient miners who cannot afford to run inefficient machines at current BTC prices. For those remaining active, the lowered difficulty means that the effective cost of mining a Bitcoin has decreased immediately, offering a short-term boost in profitability and easing operational stress until the next scheduled adjustment. While large negative adjustments signal stress in the mining sector, they are a normal function of Bitcoin’s resilient, self-correcting monetary policy.

Source: Bitcoin mining difficulty drops 11% in largest negative adjustment since China’s 2021 ban