• Rising mining difficulty: Bitcoin mining difficulty hit a new all-time high in September 2024, meaning it now requires more computational power and energy to mine new blocks.
• Impact on operational costs: As mining difficulty increases, miners’ operational costs rise, potentially driving less efficient miners out of the market or forcing them to reduce their activity.
• Potential supply reduction: Reduced miner participation could lead to a decrease in new Bitcoin supply, which, according to some economic theories, might create upward pressure on BTC prices due to scarcity.
• Adaptation by larger miners: Bigger, more efficient miners with access to advanced technology and cheaper energy may strengthen their market position, increasing their dominance in the space.
• Short-term volatility: The increased mining difficulty could introduce more short-term volatility, as changes in Bitcoin production could influence investor expectations and market demand.

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