Bitcoin mining difficulty recorded its first decline in four months, marking the end of a streak that saw it rise eight times in a row. According to data from Cloverpool, mining difficulty decreased by 2.12% at the last adjustment on January 27, which occurred at block height 880,992.
With modification, Mining difficulty It fell from its record high of 110.45 trillion to 108.11 trillion. Mining difficulty determines the amount of work miners put into validating transactions on the Bitcoin network and earning rewards. Its current level indicates that it is 108.11 trillion times more challenging for a miner to mine BTC now compared to the Genesis block.
The decrease in difficulty represents a positive development for Bitcoin miners because it indicates that the computing power needed to mine Bitcoin has decreased slightly. However, Bitcoin hash priceThe amount that Bitcoin miners will earn per PH/s has also been reduced to $58.15.
This is mostly due to the recent decline in the value of Bitcoin, with the major asset losing more than 5% of its value and falling below $100,000 for the first time since Donald Trump’s inauguration. Despite the decline, MicroStrategy announced the acquisition of 10,107 Bitcoin for approximately $1.1 billion.
Why did mining difficulty decrease?
The decline in mining difficulty after eight consecutive increases is not surprising, given the performance of Bitcoin’s hash rate over the past few weeks. The hash rate, which indicates the computing power available on the Bitcoin network, determines how mining difficulty is adjusted every two weeks.
according to CoinWarzBitcoin’s hash rate fluctuated during that period, rising to 884.16 exah/second and falling to 671.6 exah/second, with an average of 774.06 exah/second. Cloverpool now estimates that there may be cascading drops in mining difficulty if the hash rate remains low.
Meanwhile, the decline in hash rate indicates that many Bitcoin miners have stopped or reduced production capacity in the past few weeks. Mining capacity increased significantly in the last quarter of 2024 and early this year. It peaked at 955.61 EH/s on January 2, 2025.
However, successive increases in mining difficulty and the stagnation of Bitcoin’s price after peaking at $109,000 meant that many miners struggled to remain profitable under these conditions, forcing many to give up once Bitcoin’s price fell below $100,000. .
Bitcoin miner stocks are struggling
Meanwhile, the difficulty of mining and the low price of Bitcoin are not the only challenges currently facing Bitcoin miners. The success of Chinese AI model DeepSeek also led to a massive stock market crash.
Publicly traded mining companies such as Core Scientific CORZ, IREN Limited IREN, Terawulf WULF, Bit Digital BTBT, and Marathon Digital saw declines in their pre-market value, ranging from 15.77% for CORZ to 5% for MARA.
The decline reflects a broader market capitulation, which has seen big tech companies like Nvidia, Microsoft and Amazon record significant value declines due to concerns that DeepSeek, with its limited financial and hardware resources, is competing with OpenAI models.
Core Scientific, Terawulf and other mining companies that focused on diversifying their revenues by hosting high-performance computing (HPCs) infrastructure, which is essential for AI training, suffered the largest losses.
Despite lower pre-market prices for publicly listed Bitcoin miners, Currency stocks Data suggests that its performance has been linked to Bitcoin’s hash price since the halving event. If anything, it means that the shares are trading on par with the actual performance of the miners.
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