Bitcoin’s foundational network just got a whole lot tougher, setting new records for how hard it is to mine. This comes as the digital currency’s price recently surged, and those who mine it are choosing to hoard their coins instead of selling. It’s a fascinating setup that has many in the market wondering if we’re seeing clear signs of a coming price boom.
Mining a Bitcoin has never been more challenging. The network’s “difficulty,” a measure of how hard it is for computers to solve the puzzles that create new blocks, hit an all-time high of 136.04 terahashes (T). This jump of nearly 5% from its last adjustment on August 22, when it stood at 129.7 T, signals a significant increase in the computational power needed. Data from Mempool.Space confirms this shift.
At the same time, the “hashrate,” which tracks the total computing power thrown at the Bitcoin network globally, also reached a new peak. On September 10, it touched an incredible 1.1217 zettahashes per second (ZH/s), according to figures from Bitinfocharts. This surge in hashrate means more miners are joining the network. More competition typically strengthens the network, making it harder for any single entity to control it.
The Bitcoin network automatically adjusts its difficulty about every two weeks, or every 2,016 blocks. This keeps the time it takes to find a new block steady at around 10 minutes, no matter how many miners are active. So, while higher difficulty puts more pressure on miners, a soaring hashrate shows a strong belief in Bitcoin’s future among those operating the network. Varun Satyam, who co-founded Davos Protocol, a DeFi platform, explained that these big adjustments often push smaller, less efficient miners to reduce their operations. Larger, more efficient players, however, tend to hold onto their coins or even buy more, betting on a future rally to make up their costs.
Capital is clearly flowing back into the Bitcoin market. US-based spot Bitcoin exchange-traded funds (ETFs) saw net inflows of $2.3 billion this week. This follows several slower weeks, and it coincided with Bitcoin’s price jumping. You can see these trends on sosovalue.com.
Bitcoin’s price itself recently climbed to $116,000, marking a 4.7% increase over the week. The crypto market faced a dip last week due to wider economic uncertainties. However, with expectations building that the Federal Reserve (FED) might cut interest rates soon, possibly after its meeting on September 16-17, many hope for further price recovery.
Adding to this bullish picture, data from the blockchain itself suggests Bitcoin miners are entering a new phase of holding onto their assets. This “accumulation” points to growing confidence among market players that prices are heading up. Miners have been building their Bitcoin reserves for three weeks straight. Cointelegraph noted that net inflows into miner wallets hit 573 BTC per day on September 9, a level not seen since late October 2023.
The Miner Position Index (MPI), which compares how much Bitcoin miners are sending to exchanges against their yearly average, also backs this up. CryptoQuant data shows the MPI is currently low, which usually means miners are accumulating, not selling. A low MPI suggests they believe in higher prices later on, indicating a long-term shift in their strategy.
Looking at September, around 13,500 Bitcoins are expected to be mined globally. Yet, institutional demand, mainly from ETFs and companies holding crypto in their treasuries, far outstrips this supply. With miners now holding rather than selling, this creates a “supply squeeze.” Many analysts agree the crypto market could regain momentum in the third quarter, which often sees positive price action. If broader economic factors align favorably, the FED meeting on September 16-17 will be a key event, likely shaping Bitcoin’s next price moves.
Bitcoin currently trades at $116,066, up nearly 1% in the last 24 hours, according to CoinGecko. The next difficulty adjustment for the network is set for September 18, as reported by Coinwarz.