Bitcoin mining difficulty drops 7.7% as network pressure increases
Bitcoin mining difficulty dropped by about 7.7% on March 20, reaching 133.79 trillion. This marks the sharpest decline since February and a noticeable pullback from levels around 145–148 trillion earlier this year.
The adjustment occurred at block 941,472, according to CoinWarz.
The decrease means miners now require less computational power to mine a block. This temporarily increases profitability per unit of hashrate. Such adjustments occur automatically every 2,016 blocks. The main goal is to keep the average block time at around 10 minutes.
Slower blocks forced the network to adjust
The decline was caused by slower block production in the previous period. The average block time reached approximately 12 minutes and 36 seconds, significantly above the target level. Such deviations signal a drop in the network’s total hashrate. As a result, the algorithm automatically lowers difficulty to restore balance.
Previously, in February, a similar situation occurred due to weather-related issues in the United States. At that time, large mining farms temporarily went offline. After capacity was restored, difficulty increased by about 15%, but the current correction indicates a new wave of pressure.
Miners are losing profitability and reallocating resources
The drop in difficulty reflects broader challenges in the mining industry. Rising electricity costs are reducing operational margins. In response, large players are optimizing their infrastructure. Companies such as Core Scientific, MARA, Hut 8, and Cipher Mining are already reallocating resources.
Some are reducing hashrate or shutting down inefficient equipment. A notable example is Bitdeer, which sold 943 BTC and completely depleted its reserves. This highlights the need to maintain liquidity amid declining profitability.
AI becomes a key competitor to mining
At the same time, competition for resources from the artificial intelligence industry is intensifying. Both mining and AI require massive amounts of electricity and data center capacity. This is leading to a shift in investments toward more stable returns from AI infrastructure.
Some analysts already describe AI as a key pressure factor on mining. For example, trader Ran Neuner stated that AI has become Bitcoin’s main competitor for energy resources. Against this backdrop, some companies are actively transitioning into high-performance computing. If the trend continues, the structure of the mining market could change significantly in the coming years.
Recently we wrote that Bitcoin is trading around $70,608 as of March 21, remaining in a consolidation zone after a recent correction. After falling to around $60,000 in February, the market managed to recover and move back above $70,000.
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