ZB Academy:Bitcoin mining difficulty hits record high

ZB Academy
4 min readJan 11, 2021

JPMorgan analysts released an analysis report on the 10th. The report stated that although the Bitcoin ETF (exchange-traded fund) has a positive effect in the long run. But in fact, it may directly have a negative impact on Bitcoin prices in the short term.

The report pointed out that because the SEC(U.S. Securities and Exchange Commission) will have some new personnel changes this year, people are generally optimistic that the SEC will approve Bitcoin ETFs this year, but such changes will pose challenges to GBTC(Grayscale Bitcoin Trust). Due to regulatory and other restrictions, some financial institutions and funds cannot directly own Bitcoin, or even buy GBTC directly from Grayscale. In order to participate in the Bitcoin operation, they can only purchase GBTC at a premium in the secondary market. Participating in ETFs does not need to bear the premium, which reduces the attractiveness of GBTC in institutional transactions and also reduces the premium of GBTC, thereby reducing the attractiveness of GBTC in mass transactions. At present, some institutional investors buy GBTC with net asset value in order to profit from this premium. However, due to the prospect of Bitcoin ETFs and the resulting decline in the GBTC premium, some institutional investors who bought in the second half of last year may also sell after the 6-month lock-up period expires. This move will further put downward pressure on the GBTC premium, which will affect the price of Bitcoin.

In addition, according to a report released on the 9th, the mining difficulty of Bitcoin reached 20.61T, a record high, an increase of 10.79%, reaching a record high. Previously, the highest mining difficulty was 20T, which will be reached in October 2020. Thanks to the growth of mining income and the bull market of Bitcoin, the scale of the mining industry is larger than ever. Edward Evenson, head of business development at mining software company brains, said: “Considering that mining revenue has tripled in recent months, it is not surprising that the difficulty of Bitcoin mining has reached a record high.”

According to ZB.com’s official market data, Bitcoin is currently quoted at $37,732, a 24-hour drop of 8.33%, and the 24-hour price range is between $36,500 and $41,336.

The XRP token, which was previously affected by the SEC, fell sharply at the end of last year, but the current price has clearly rebounded from a low level. According to many analytical data, XRP’s “dumping purchase” is likely to be dominated by Asian investors. Not only US exchanges, but US investors such as Grayscale and Bitwise have also excluded XRP from certain funds, but it seems that the impact on XRP trading has not yet reached Asia. Sinhae Lee, a partner of Block72, a Chinese blockchain consulting company, said that in the current overall bull market in the cryptocurrency field, low XRP has become attractive. Chris Thomas, head of digital assets at Swissquote, a financial investment bank, believes that traders value relevance when trading.

On the 8th, the National Bank of Kyrgyzstan released a draft law that will legally define cryptocurrencies and how they are used in Central Asian countries. According to an explanatory note, according to the proposed legislation, its central bank is complying with FATF (Financial Action Task Force) requirements to regulate cryptocurrencies and prevent related money laundering and terrorist financing risks. The note stated that as citizens of Kyrgyzstan are becoming more and more interested in cryptocurrency and the technology is increasingly popular in e-commerce worldwide, it is important to mitigate the risks associated with encryption.

About ZB Group

ZB Group was founded in 2012 with the goal of providing leadership to the blockchain development space and today manages a network that includes digital assets exchanges, wallets, capital ventures, research institutes, and media. The Group’s flagship platform is ZB.com, the industry leading digital asset exchange. The platform launched in early 2013 and boasts one of the world’s largest trading communities.

ZB Group also includes ZBG the innovative crypto trading platform, and BW.com, the world’s first mining-pool based exchange. Other holdings include wallet leader BitBank.

Industry intelligence and standards are headed by the recently launched ZB Nexus who embody the core values of ZB Group and open-source their reports and analysis for the public.

Learn more about ZB Group by visiting www.zb.com.

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ZB Academy

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