Bitcoin difficulty drops by over 11%, in steepest drop since 2021 China ban

Bitcoin mining difficulty has undergone a major downward adjustment, falling by over 11%. This marks the steepest negative readjustment since the mass exodus of miners following China’s crackdown on cryptocurrency mining in May and June of 2021, an event that saw nearly half of the global hash power temporarily shut down.

The difficulty adjustment is a critical feature of the Bitcoin protocol, occurring roughly every two weeks (or 2,016 blocks) to ensure that the time taken to find a new block remains near the target average of 10 minutes. A sharp drop in difficulty signals that a substantial amount of hashing power—the total computational effort dedicated to mining—has suddenly left the network.

While the 2021 drop was regulatory, the current downturn is largely attributed to severe profitability compression compounded by extreme environmental factors. Recent intensive cold weather events across North America, especially in key mining states like Texas, have forced many large-scale mining operations to temporarily curtail their activity. Miners often voluntarily disconnect their machinery to reduce strain on local power grids during peak demand, which spikes during severe weather.

For the miners who remain operational, this difficulty reduction is beneficial. Lower difficulty means that the computational power required to successfully mine a block has decreased, resulting in an immediate increase in daily profitability for active machines. This self-regulating mechanism works to stabilize the network, making mining more attractive until enough hash power returns to push the difficulty level back up.

Source: Bitcoin difficulty drops by over 11%, in steepest drop since 2021 China ban