Bitcoin's mining difficulty is set to increase by 3%, marking the fifth consecutive positive adjustment. This comes as publicly traded bitcoin miners approach a combined market cap of $40 billion, having doubled in just seven months amid bitcoin's price surge towards $100,000.
Miners face significant revenue challenges, especially after a 50% reduction in block rewards in April, when their market cap was around $20 billion. Currently, only 450 bitcoin are mined daily, with fees at cycle lows of just 10 BTC ($946,000) as of November 27.
The anticipated increase in mining difficulty, which is already above 1 trillion, complicates matters further. This adjustment occurs every 2016 blocks, or approximately every two weeks, making it increasingly costly for miners to produce new blocks.
The hashrate, a measure of computational power for mining, has remained above 700 exahash per second (EH/s) for over a month, currently averaging 726 EH/s. This consistent rise in hashrate has prompted many miners to explore diversification into AI and high-performance computing (HPC) sectors.
For instance, IREN's shares surged 30% recently due to renewed interest in AI. Meanwhile, MARA Holdings has bolstered its bitcoin holdings, acquiring an additional 703 BTC after issuing a $1 billion convertible note, bringing its total to 34,794 BTC.
As of now, the CoinShares Valkyrie Bitcoin Miners ETF has seen a 60% increase year-to-date, though this lags behind bitcoin's impressive 113% rise.