Bitcoin price has remained steady above the $18,000 mark in recent days as mining difficulty continues to rise
Mining difficulty on the Bitcoin network has climbed to a new high after increasing 8.9% over the past 24 hours. The Bitcoin (BTC) network hash rate is now above 130 EH/s. Data from Glassnode, an on-chain analytics provider, shows mining difficulty is now less than 5% away from setting an all-time high.
Glassnode tweeted that “Bitcoin’s mining difficulty rose 8.9% today. It is now only 4.4% below its ATH.”
Bitcoin’s price briefly surpassed $19,000 for the first time in three years but dipped below $17,000 multiple times during the week as bulls and bears fought for control of the market. Over the last 24 hours, however, the price rose more than 5%, and BTC is currently trading around $18,508.
The rise in mining difficulty has generated optimism across the crypto market, as similar spikes accompanied the previous bull cycles in 2013 and 2016. Still, it remains uncertain whether the current bull run will reach a new all-time high after Bitcoin moved to within about 3% of its previous record.
While increasing mining difficulty can be a bullish signal for price, it has drawbacks for users. Higher difficulty typically translates into increased fees and longer times to produce blocks. Consequently, transaction confirmation times on the network may grow, and the number of unconfirmed transactions in Bitcoin’s mempool could rise.
Ethereum hash rate rises as developers prepare for Ethereum 2.0
The increase in mining difficulty is not limited to Bitcoin’s network. According to Glassnode, on November 27 the Ethereum network hit a new record for mining difficulty. That period coincided with Ether’s price falling from $600 to $513 in a matter of days. Since then Ether has recovered, gaining more than 10% in the past 24 hours and trading around $587 per coin.
Ethereum’s rising mining difficulty comes as developers prepare to roll out Ethereum 2.0. The transition to Ethereum 2.0 will move the protocol from Proof of Work to Proof of Stake. Once staking replaces mining, mining difficulty will no longer be relevant in the same way, because block validation will depend on staked coins rather than computational work.