Analysts at research and brokerage firm Bernstein aren’t worried about the “flattish” price action of bitcoin, arguing that it can be great for miners — when economics are driven by competitive hash-rate wars.
On Thursday, Bitcoin mining difficulty dropped 5.7% — marking the largest negative adjustment since the bear market lows, when difficulty fell 7% on Dec. 6, 2022 and bitcoin was trading for around $17,000. For example, when there’s an increase in the number of miners, the difficulty of mining bitcoin rises. Conversely, if there is a decrease in the number of miners competing to find new blocks, the protocol lowers the mining difficulty, making it easier for the remaining miners to discover blocks.The negative difficulty adjustment followed a 10% drop in network hash rate since the last difficulty adjustment on April 24, from a seven-day moving average of 639.58 EH/s to 577.
The analysts expect these miners to further consolidate their market share via an organic and merger and acquisition-led expansion, given their strong bitcoin balance sheets and cash positions. CleanSpark recently acquired three mining sites in Mississippi for around $20 million and agreed to purchase another two sites in Wyoming for approximately $19 million, the analysts noted. Marathon also recently acquired new sites at a cost of around $265 million.
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