The world of Bitcoin mining has just experienced a major shock as the difficulty adjustment algorithm recorded a decrease of 11% – the largest number since the ban on coin mining in China in 2021. This is the situation, this event not only reflects the difficulties related to weather and the economy but also reveals a large-scale "blood transfusion" within the mining community. #Colecolen
The reason behind the record drop in Hashrate
Two main factors have converged to create this decline. First, the harsh winter storm in the United States forced many large data centers to temporarily shut down to prioritize the residential power grid. Second, and most importantly, is the decrease in Bitcoin prices. $BTC
That's how it is, when the selling price of Bitcoin no longer covers electricity and maintenance costs, small miners with old equipment have to turn off their machines. According to Bitcoin's self-balancing mechanism, when there are fewer miners, the network will automatically reduce the difficulty to ensure the block generation rate does not stall.
The polarization between small miners and the giants
While many mining operations are struggling to survive, publicly listed mining companies with strong financial potential are seeing this as a golden opportunity to increase their market share.
CleanSpark: Just announced the purchase of an additional 414.37 BTC, increasing the total holdings to an impressive 13,513 BTC.
#DDCEnterprise : Continuing the accumulation strategy by purchasing an additional 105 BTC, currently owning a total of 1,888 BTC.
That's how it is, the "scooping" actions of these organizations indicate that they are preparing for a long-term growth cycle. The decrease in difficulty allows them to mine more Bitcoin with the same amount of electricity consumed, thus optimizing future profits.