Bitcoin Mining Difficulty Plunge to Threaten Security, Maybe Not Price

Bitcoin’s mining difficulty is correlated with its hashrate, which is the measure of computational power per second used when mining, or the speed of mining.

article-image

Blockworks exclusive art by Axel Rangel

share
  • Mining difficulty is the measure of how challenging it is for miners to create new blocks
  • Difficulty had been steadily rising until late May when the hashrate started to falter

Bitcoin’s mining difficulty, the measure of how arduous it is for miners to solve the equations necessary to create new blocks, may fall a record amount of more than 20% in four days. 

A 21% decrease in difficulty, which is what on-chain data sites are predicting, would be the largest difficulty plunge in bitcoin’s history. Bitcoin’s difficulty has decreased for the past two adjustment periods, falling 16% on May 30 and 5% on June 14. Another fall would mark the first time since December 2018 that the measure fell three consecutive times. 

Difficulty is adjusted every 2016 blocks, which generally is about every two weeks. The adjustment occurs so that the average time between blocks remains at 10 minutes. The current average difficulty level is 19.93, up from 15.78 one year ago. 

Bitcoin’s mining difficulty is correlated with its hashrate, which is the measure of computational power per second used when mining, or the speed of mining. A higher hashrate means higher difficulty, and vice versa. 

“Difficulty has been increasing steadily for a long time so if you weren’t worried about the hashrate a few months ago, there’s no reason to be worried now,” said Garrette Furo, advisor to the Cosmos Network. “There was a pretty intense dip in hashpower a year or two ago and the price didn’t even react, so maybe it has more to do with the news. Causality for price movements is very odd in the bitcoin market.” 

Even with a fall in difficulty, bitcoin mining is substantially more challenging than in the past, Furo pointed out. 

Bitcoin mining difficulty

There are several factors that impact hashrate, the recent dip is largely attributed to China’s mining bans, but it is not expected to last forever. 

“China’s crackdown results in lower hashrates and difficulty while miners are offline,” said. “This is temporary.”

While a lower hashrate is temporary, it is unclear when it may start increasing again. Bitcoin mining requires space and infrastructure that takes time to create. Some miners may be starting to leave China for other, more mining-friendly locations, but it is difficult to predict how quickly this may happen. 

A high difficulty measure means it takes more computing power to mine the same number of blocks, enhancing network security. 

“A decrease in difficulty is associated with a decrease in security,” said Furo. “The network is more vulnerable but that does not mean it’s particularly easy to attack or dangerous to use.” 

Bitcoin’s price, Furo pointed out, is increasingly reflective of government actions. 

“While China is working on kicking out miners, Latin America and El Salvador are totally welcoming the remittance angle, not the store of value angle, to fix remittance infrastructure,” said Furo.

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Flashnote Template (41).png

Research

We believe that few tokens at the application layer are diverging more from fundamentals than ZORA. Its fully-diluted P/S sits at 90x, pricing significant growth despite a consistent decline in weekly revenues since late July. We foresee an 80% decrease in protocol net margins due to a recent update to the fee structure that reduces trading fees from 3% to 1%, while boosting creators’ portion of the fee split. ZORA’s supply overhang also represents a near-term headwind, with 45% of ZORA’s supply (4.5B tokens or $350M at current prices) earmarked for the team & investors beginning to unlock on October 23, 2025 (36-month linear vesting schedule).

article-image

Insiders have the best information — markets should be willing to pay for it

article-image

The CFTC-regulated exchange is opening doors to crypto builders and traders through grants, partnerships, and new deposit options

by Blockworks /
article-image

DFS tells banking organizations to integrate blockchain monitoring tools to curb money laundering and sanctions risks

by Blockworks /
article-image

New short and long-term priorities include L1 gas boosts, ZK-EVMs, privacy reads, and a lean, quantum-resistant Ethereum

by Blockworks /
article-image

The new stBTC token redistributes Bitcoin gas fees to users, creating liquid yield without inflation or lockups

by Blockworks /
article-image

The reserve will collect protocol revenues to back W token, alongside new yield and unlock schedule

by Blockworks /