We have seen one of the biggest rises in mining difficulty since 2021. A 9.26% increase in difficulty pushed it closer to the all-time high meaning that it is harder than ever to mine BTC despite the crypto winter still going strong. Mining became so unprofitable for many companies that they had to liquidate some of their bitcoin positions to cover expenses.
The war in Ukraine is also messing with the plans of many miners as energy prices are soaring in Europe meaning that thousands of farms situated in the UK, France, Italy, Germany, and other EU countries will be impossible to run efficiently. At the same time, we also received news that Texas authorities are not going to further expand the number of issued licenses for bitcoin mining in the state which will hurt many mining farms that had huge plans for expansion in the US.
However, these news stories are also accompanied by exciting developments in other parts of the world. The Peruvian government sees that many citizens are hedging against foreign and national currencies by investing in crypto assets. Instead of shutting down such endeavors, the government wants to help some people to start mining. The Iranian government plans to pay for some imports with BTC and ETH while issuing more licenses to miners.
It seems that despite the falling price of BTC, the race for higher hash rates is now international and has a political tone to it. The crypto community is quite bullish on Bitcoin. We know that over 62% of all bitcoin wallets did not send out anything which means that many users are holding their assets tightly and believe that the asset will recover and soar to new heights.
Miners have to keep up their operations even when losing money. Despite the recession and crypto winter, the accumulation of Bitcoin is the only strategy that many crypto enthusiasts and miners see as valid and reliable. We must remember that energy prices and availability may affect the hash rate race and create unexpected imbalances in where assets are accumulated.
