Bitcoin mining difficulty dips slightly after record highs

Bitcoin’s mining difficulty has dropped slightly after reaching its highest level ever at the end of May.

On Saturday, June 15, the network recorded a small but notable decrease in difficulty, bringing it down to approximately 126.4 trillion. This follows the all-time peak of 126.9 trillion on May 31, according to data from blockchain analytics firm CryptoQuant.

The drop is slight, but that’s a landmark for mining. Bitcoin’s difficulty is automatically adjusted approximately every two weeks to reflect changes in the total hashrate, the sum of all miners’ computing power aiming for solutions to the Bitcoin network. 

When additional miners join the network, the difficulty increases to help maintain block production at regular intervals. When miners go offline because of cost or inefficiency, the difficulty drops in adjusting.

The hashrate is still robust, surpassing a psychological barrier of 1 zetahash per second (ZH/s) in April.

Rising costs challenge miners

While it remains a tad less tough, several miners struggle with heavier workloads. The April 2024 halving, a scheduled phenomenon that cuts Bitcoin’s block reward in half every four years, slashed the reward for successfully mining a block to 3.125 BTC from 6.25 BTC for miners, which translates into half the revenue for the same work.

Factors such as surging electricity prices, rising hardware costs, and the pressure to stay updated with the latest technological turnover have caused many smaller or medium mining operations to be on the brink. 

Production costs are expensive for some small-scale miners, particularly in regions with relatively high electric power prices or relatively inefficient power supply systems. For those miners, keeping operations going is burning cash, a high-stakes wager, given that they either have access to cheap energy or anticipate a sharp rise in the price of Bitcoin shortly.

Big players grow despite headwinds

While many miners are scrambling, larger publicly traded companies do the opposite: ramping up and holding onto Bitcoin.

Marathon Digital Holdings (MARA) said it produced roughly 35% more Bitcoin mined in May despite facing industry headwinds. The firm also mined 950 BTC for the month, an increase from April’s amount. Rather than liquidating coins into fiat to cover costs — as many miners often tend to do — MARA decided to hold onto those obtained through Bitcoin mining and increased the size of their corporate treasury to 49,179 BTC.

“Record production month for MARA, and we sold zero Bitcoin,” said Salman Khan, Marathon’s chief financial officer, in a June 3 post on X.

CleanSpark, another major mining company with a degree of emphasis on renewable energy, also reported solid results. The company reportedly mined 694 BTC during the month, an increase of approximately 9% from the prior month. CleanSpark’s capacity of hashrate, an essential performance measure, rose to 45.6 exahashes per second (EH/s) by the end of May.

CleanSpark CEO Zack Bradford said that the increase was attributable to continued investment in cleaner forms of energy and improved mining hardware. He added that they had intentionally scaled their footprint over the years to remain profitable in tough macroeconomic environments.

Both companies are part of a new breed of miners who consider Bitcoin a revenue source and a strategic financial asset. It has boiled down to holding Bitcoin on the balance sheet, a decision increasingly adopted by the corporate treasuries experimenting with crypto.

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