Welcome back to HashrateUp Focus. Today, we're going to talk about difficulty.
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More precisely, we're going to put the current difficulty developments into historical context.
We're also going to talk about why this might be happening and give an outlook for the future.
We have covered difficulty before with hash price, just in general what it is.
However, right now, something quite historical is happening in Bitcoin mining, which warrants a closer look.
So sharing my screen here, you can see the difficulty over the last one year.
You can see here that difficulty has steadily increased, increase after increase, the occasional drop when it overshot.
But then it really kept on trucking until we finally, in October of last year, reached a all-time high difficulty-wise of $155 trillion.
From there, we have seen decline in Bitcoin price and thus also decline in Bitcoin difficulty.
We've had one drop, two drops, another drop.
Then we had somewhat of a stagnant adjustment, which I don't really count.
right it's plus minus zero then we had another drop and another one and now we're looking to have
another drop of about 17 percent which is absolutely massive right these things don't
happen often block time currently is at 12 minutes and six seconds we can see also here i love this
chart um that currently the network is running 96 blocks behind schedule so a massive amount why
this is happening we'll get to in a minute but what i want to do first is quickly explain
other periods in time when this has happened right so first off we have the bear market collapse
of 2011 i believe this is yeah when bitcoin price crashed from the enormous heights of 32
all the way down to $2.60.
You can see similar things here.
Difficulty is rising half a trillion 1 trillion 1 trillion Then it sort of bottomed or topped out and went down And if you count the difficulty drops it a bit hard to see here
You have one, two, three, four, five, six, seven difficulty drops in a row.
You can count this one as an eighth one, right?
But the big important news here or the important part is that difficulty dropped from 1.88 trillion
all the way down to 1.09 trillion.
So about like a 40, 50% drop, right?
That was in 2011.
And then, of course, we had the China mining ban.
When China banned Bitcoin mining,
this was also very good time for miners who stayed online.
Not so good for all of those who didn't.
But you can see here over a short timeframe,
over, what is this?
One, two, three, four, five difficulty adjustments, right?
So roughly 10 weeks, we had a difficulty drop
from 25 trillion all the way down to 13 trillion.
Another 40, 50% drop, right?
And now again.
And so now over the last couple months,
we have seen this drop,
which is quite historical in Bitcoin mining.
doesn't happen often, especially not the fact that we've had one, two, three, again, four, five,
and then we're looking at another one, six drops in a row. That doesn't really happen a lot, right?
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So there's, I think, two developments here that push network
hash rate down, difficulty down and hash price denominated in Bitcoin up.
Right.
More structurally, I think a lot of these public miners are pushing towards AI
because their shareholders are pushing them to because then the stock price
tends to move up.
Right.
News like this Nvidia invests billion in CoreWeave as AI data center build out accelerates Now why do they do that Because the public miners own infrastructure they own power contracts
they have access to the grid to deploy fast, and time to market is essential. And so all of these
AI companies are super interested in deploying with these companies, and they have a lot of money
to do so. So these news are not letting up. Here's another one, Riot Stock jumps 12% as AMD deal
anchors texas ai data center expansion right so marathon is announcing this cleansbug is announcing
this riot core weave all of these guys um here's another one core weave deploy 16 000 gpus at
delayed texas data center for open ai so a lot of this is structural i think this ai game is a
competition for bitcoin mining it pushes bitcoin mining out to the fringes more and the power is
just being used elsewhere because it generates more money. And so I think over the course of the
next two years, we're going to see a lot more of this. And this means a structural downtrend for
Bitcoin mining. Also, along the lines of this, we can see that a lot of the manufacturers,
Oradyne, BitDeer, Bitmain, Microbitule, all of these guys are struggling to sell their units
because previously, the companies that I just mentioned, they are buying these units in batches
of tens of thousands previously, right?
Because they're all deploying them as fast as they can.
And these deals are, yeah, kind of missing from the market now.
And you can see a lot of the manufacturers now turning into self-mining
or mining via their sort of companies that they have at arm's length
to deploy the machines themselves.
There's also pressure, I believe, for companies like Bitmain
to use the ASIC chips that they have produced
because what they do is they get an allocation at, let's say, TSMC
where they build the chips and now they kind of have to use them.
Otherwise, they lose their allocation or there's a risk that they lose their allocation
and they can't afford that because it's essential to their business, right?
So now these ASICs are dead in the water.
There's less bias for them.
So now they start deploying them themselves.
We've seen this also in ASIC pricing.
ASIC prices have plummeted recently and has a lot of pressure right now
on miners, so it's a good time to get involved, I believe.
Furthermore, the large difficulty adjustment of minus 17%,
this is a very sort of spot trend right now We seeing news like this hit the news feed right Bitcoin miners unplug 110 extra hashes to ease grid strain during Arctic blast
And just in today, we have found reuse a hash rate drop 60% amid winter storms.
So very, very, very cold temperatures mean people are using electricity for heat,
means a lot of electricity consumption, means electricity prices go through the roof,
means all of these Bitcoin miners and power contract owners
are selling back the power, turning off the mining
and selling back the power to the grid
in order to make the most money possible, right?
200 exahashes is no small feat.
If you go into the network here,
you can see the all-time high was like 1,157 exahashes.
200 exahashes alone of that is like 15% or something like that
of the whole network just being shut off, right?
A lot of this is due to the concentration of the Bitcoin mining network in the US also, right?
And now we're back down to 993, right?
So I think that the cold obviously is going to go away, right?
That's going to push hash rate back up again once these machines get turned back on because, you know, they're profitable.
Just now it makes more sense to sell the power back, but that's a temporary issue.
But then this AI thing, I think, you know, is going to be with us for the next few years.
And so I'm happy about that, right?
Because it means the mining that I'm doing makes more sets, all right?
And machines are cheap.
So it's a good time to get involved.
I'll have a video coming out next time about how I'm approaching Bitcoin mining hosting, right?
Because I think that's a very tough market to make money.
And it's going to mean you're going to wait a long time to make your money back.
But I think there are ways to play that right.
And so, yeah, stay tuned for that one.
I hope you learned something through this difficulty episode.
It's a really, really interesting time in Bitcoin mining, right?
These drops don't happen every week or every year.
And it's very, very seldom that they do.
Again, hopefully you learned something new.
Leave a like, subscription, comment.
All of that good stuff is highly appreciated.
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So, yeah, I hope you have a good week and had a good January.
Here's to a good February 2026.