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Bitcoin’s mining difficulty has surged by 3.81% in the past 24 hours, while its price has plummeted by 1.12%. This stark contrast is a telltale sign that institutional investors are still wary about investing in Bitcoin due to market volatility and regulatory uncertainty.
The sudden spike in mining difficulty to 108T indicates a significant increase in miners’ activity on the network. This trend may be attributed to Bitcoin’s recent halving event, which has reduced the reward for block creation by 50%. In an effort to maintain profitability, miners are adjusting their operations to accommodate the decreased reward.
In the last year alone, mining difficulty has increased by over 50%, which suggests that more and more computers are joining the network. This surge in hashrate could be a sign of growing optimism among Bitcoin miners. However, the stark contrast between the rising mining activity and stagnant price is an alarming development.
Bitcoin’s failure to match its mining difficulty with price growth can only mean one thing: institutional investors remain hesitant to jump into the market due to uncertainty surrounding regulatory frameworks and macroeconomic factors.
As we close out 2024, it appears that Bitcoin’s value proposition as a store of value has hit a roadblock. The lack of substantial price appreciation despite a massive surge in mining activity casts doubt on its ability to continue being an attractive option for institutional investors.
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Source: u.today
