bitcoin mining difficulty just set another all time high at 134.7 trillion. what’s odd is this happened while the total hashrate actually slipped from over 1 trillion h/s in early august to about 967 billion today.
so we’re looking at fewer hashes securing the network but a tougher environment for miners. that means margins are getting destroyed. smaller miners with higher energy costs are basically being forced out, while the big corporate operations with cheap power and next-gen hardware dominate.
this raises two possible outcomes:
bullish supply squeeze : public miners and industrial-scale players tend to hoard more bitcoin rather than dump. if small miners are forced offline, the circulating supply hitting exchanges could shrink. that’s historically set the stage for price rallies.
bearish capitulation risk : at the same time, thin margins often push stressed miners to sell reserves to cover electricity and debt. we’ve seen in past cycles how waves of miner selling can trigger sharp corrections.
a fun twist: three solo miners still managed to hit blocks in july and august. one pocketed $373k with what was probably a tiny setup compared to giants. so the “underdog wins” story is still alive.
from a tax perspective, this miner shakeout is creating some wild situations. many smaller operations are having to liquidate btc holdings they've been sitting on for years, triggering massive capital gains events. some are scrambling with tools like awaken.tax to calculate the tax implications of selling mining rewards from different time periods at various cost bases. it's messy when you're forced to liquidate under pressure rather than planning strategic tax-loss harvesting.
what’s your take? does this difficulty spike mean bullish accumulation or another miner-driven correction coming soon?
