Mining Difficulty Reaches Record Highs
Bitcoin miners experienced a drop in monthly production in January as the network’s mining difficulty surged. The increased computational power required to validate transactions and mine new blocks put significant pressure on mining firms, with many seeing a downturn in output.
Leading Bitcoin miners, including Hut 8, Marathon Digital (Mara), and Bitfarms, reported a decline in production compared to December 2024. However, Riot Platforms defied the trend, recording a 2.1% increase in Bitcoin production.
Rising Network Difficulty Impacts Miners
Throughout January, Bitcoin’s network difficulty hovered around an all-time high of 110 trillion (T). This marks a 27.8% increase since the last Bitcoin halving event on April 20, 2024.
Source: Riot Platforms
Anticipating this surge in difficulty, mining companies have been upgrading their hardware and optimising operations to maintain profitability. Despite these efforts, many firms struggled to keep up with the rising computational demands.
Hut 8, for instance, mined only 65 BTC in January, marking a 27% drop from the previous month. Similarly, Marathon Digital saw a 12.5% decline, while Bitfarms recorded a 4.7% reduction in Bitcoin output.
Riot Platforms Expands Operations
In contrast to its competitors, Riot Platforms increased its Bitcoin production by commissioning a new mining facility in Texas. The company initiated a large-scale 1-gigawatt development to enhance its mining capabilities.
Jason Les, CEO of Riot Platforms, highlighted the impact of the expansion, stating:
“The Corsicana Facility reached a deployed hash rate of 15.7 EH/s towards the end of the month. We also continue to see strong results from newly deployed miners and immersion systems, reflected in the significant improvement in our operational hash rate and utilisation rates.”
Bitfarms monthly Bitcoin production. Source: Bitfarms
Meanwhile, Hut 8 CEO Asher Genoot announced that the company is nearing completion of infrastructure upgrades that should bolster its mining capacity in the coming weeks.
Future Outlook for Bitcoin Mining
Although mining difficulty reached 110T earlier in January, it fell slightly to 108T by the month’s end, leading to an estimated hashrate of around 832 exahashes per second (EH/s).
Industry analysts predict a potential decline in Bitcoin mining hashrate due to reduced difficulty levels and fewer preorders for mining equipment. While some companies, such as Riot Platforms, continue to expand their operations, others may struggle to maintain profitability in an increasingly competitive landscape.
