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Bitcoin mining difficulty has reached ATH

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Bitcoin mining difficulty has reached ATH

As Bitcoin nears $28,000 and predicts a new record for Bitcoin mining difficulty, billionaire investor Ray Dalio is raising concerns about “World War III.”

Bitcoin mining difficulty has reached ATH

Bitcoin Mining Difficulty Peaks: 5 Key Insights for This Week in BTC As Bitcoin nears $28,000 and predicts a new record for Bitcoin mining difficulty, billionaire investor Ray Dalio raises concerns about “World War III.” Bitcoin’s week starts with a classic short squeeze, which has both bulls and bears following spot price swings and liquidity piling up.

Bitcoin Mining Difficulty Peaks: 5 Key Insights for This Week in BTC

Bitcoin Mining Difficulty Peaks: 5 Key Insights for This Week in BTC

Market sentiment fluctuates with these price fluctuations. Optimistic predictions abound as Bitcoin moves higher, only to give way to worry and uncertainty when the downside takes over.

Despite October’s historic record as Bitcoin’s most successful month, seasoned market watchers are cautious. Beneath the surface, network fundamentals are at an all-time high, and mining difficulty appears set for its third significant increase in 2023.

Amid a slowing macroeconomic environment, geopolitical tensions in the Middle East came into focus this week, giving Bitcoin investors an additional source to monitor price volatility.

Bitcoin price and short pressure

The Bitcoin market experienced significant volatility on its weekly basis, with a series of brief pushes that pushed BTC/USD above $1,000. Analysts are now expressing optimism as Wall Street’s first trading session diverged from the bearish sentiment seen over the weekend, largely driven by worrying macroeconomic reports in the US.

“Old” coins in motion

Interestingly, the change in market sentiment is more than just a short squeeze. After a long period of inactivity, the “old” Bitcoin left its wallet and went into hibernation. Such movement can indicate a change in price direction. As determined by the age consumption measure.

Ray Dalio’s warning about “World War III”

Ray Dalio's warning about "World War III"

In the coming days, the macroeconomic outlook will release less data from the US. This was further emphasized by the recent US inflation data which exceeded market expectations.

Billionaire investor Ray Dalio has warned that the risk of “World War III” has increased by 50% in the past two years. Although progress toward a global conflict between major powers, particularly the United States and China, remains contained, he noted, a shift toward a brutal world war could occur if the major powers engage in direct conflict.

The GBTC discount narrows

Grayscale Bitcoin Trust (GBTC) is trading at its smallest discount to net asset value (NAV) since December 2021. GBTC’s resurgence follows Grayscale’s legal victories against US lawmakers, boosting confidence in the approval of an exchange-traded fund (ETF). , a move that could significantly affect institutional interest in Bitcoin.

While the path to GBTC becoming an ETF is unclear, the US Securities and Exchange Commission (SEC) is evaluating various Bitcoin ETF proposals, adding further complexity and uncertainty to the landscape.

Mining difficulty is increasing

Bitcoin mining difficulty is on the verge of hitting new highs as the price of Bitcoin rises. The automatic readjustment on October 16 is expected to lead to another significant increase, reflecting continued growth in network fundamentals.

In 2023, mining dynamics followed a familiar pattern. So that both the mining difficulty and the hash rate have repeatedly reached their highest level. However, the upcoming increase in mining difficulty could put it among the top three increases this year, which would be approximately 7%.

If this increase is approved. The difficulty level will exceed 60 trillion for the first time, reflecting the intense competition between miners and the exceptional security of the Bitcoin network.

Estimates for hash rates vary from source to source. MiningPoolStats raw data shows the most recent all-time high of 497.66 (EH/s) reached on October 9th.

The combination of high difficulty and relatively moderate price of BTC inevitably raises questions about the profitability of mining. As costs per bitcoin continue to rise, there are periodic concerns about miners’ incentives to persist.

The actual cost of producing a total of each Bitcoin varies depending on several factors, including physical location. As Cointelegraph previously reported. Next year’s halving block subsidy will reduce the bitcoins received per mined block by 50%.

James Stratton, researcher and analyst at cryptocurrency insight firm CryptoSlate, expressed his view, saying, “I think the current price is acceptable for miners right now. But with the halving approaching and the difficulty increasing, miners will have to adapt quickly.”

A weak “high”

Is the fate of “October 2023” in the balance? Even minor fluctuations in the spot price of Bitcoin can significantly impact October’s monthly gains due to the sustained stability of the current trading range that has been in place since March. influence.

While last week depicted a negative outlook. The recent rally to $28,000 has sent BTC/USD up 3.5% since the beginning of the month.

While two weeks remained until the end of the month. The ultimate performance of Bitcoin is uncertain. The 3.5% gain, while not weak, is still Bitcoin’s weakest October since 2018.

CoinGlass data also shows that the worst October on record in 2014 resulted in a “only” 12% loss for Bitcoin. which indicates that a new negative record will appear if conditions are met.