According to the latest update on BTC.com, Bitcoin mining difficulty has dropped by 7.2%, which is the biggest drop since July 2021. However, this is the largest negative plunge followed by China’s elimination of cryptocurrency mining activities that forced the network’s hashrate to crash.
Due to the significant drop, mining economics industries have suffered a tough phase in the past few months. The margins were fastened with inclining power costs and decreasing Bitcoin prices, leaving some miners out of money. However, this condition seems to be due to unplugged machines observed by industry insiders during the last week.
Last week, a Vice President of Business Development at Foundry, Jeff Burkey, said that a difficulty drop was due to discontinuing machines that are no longer profitable. However, this fall, William Foxley, strategy director of Compass Mining, said that the industry would face further difficulty shortly depending on how unprofitable some machines are. According to data from mining software firm Luxor, more ASIC machines were flooding the market even though average prices have crashed by around 80% compared to last December.
However, the Bitcoin network has managed to recover mining difficulty, which makes adjustments every two weeks or every 2,016 blocks to ensure that the supply of new coins remains stable. Last week Luxor’s COO Ethan Vera said that a remarkable fall could provide breathing space to troubled miners who could weather the hashrate with high-efficiency machines and low-cost operations.