As a result of Bitcoin’s strong performance over the last two months, there have been signs that its mining economy is becoming increasingly competitive. A few days ago, news broke that Bitcoin’s mining difficulty reached a new all-time high which potentially signals miners’ optimism about the bitcoin market going forward. This research note looks at mining data such as difficulty, block reward, and block reward distribution over time to ascertain the effect Bitcoin’s recent performance has had on its mining – as well as to uncover any signs in the mining data about the outlook of the general market over the rest of the year.


Following a difficulty adjustment on June 1st, Bitcoin’s difficulty reached an all-time high of 7.459681e+12 – narrowly surpassing the previous high of 7.454969e+12 in October 2018. Difficulty is a function of the total amount of work contributed to mining Bitcoin by miners within a given time period and, as such, this new all-time-high is a signal of a mining industry utilizing more efficient equipment or simply commanding more resources. The chart below shows Bitcoin’s difficulty over time whilst highlighting 2019 onwards and its recent all-time high.

The sustained difficulty increase since the latter half of 2018 speaks volumes about the mining economy’s faith in the recovering Bitcoin market and to their improving margins. We expect further difficulty increases over the summer due to increases in the supply of cheap renewable energy in economies like China.

Block Reward

The value of the per day block reward has steadily been increasing since the start of the year due to the strong performance of Bitcoin year to date.

The only other time where we have seen block reward value within a similar range was in the second half of 2017 – July to December.

Below we’ve plotted the share of block rewards distributed to the top 100 addresses from 2019 onwards, accounting for around 296, 898 BTC of the total estimated 710, 386 BTC distributed as block rewards from January 1 to June 2, 2019.

The “Halvening” 2020

It is interesting to consider the effect that the next “Halvening” – wherein the block reward will fall from 12.5 BTC to 6.25 BTC – will have on the mining economy. The next “Halvening” is due to happen on May 22, 2020 – the estimated day by which 210,000 blocks will have been mined since the last “Halvening” on June 10, 2016. Assuming the Bitcoin’s price remains the same, potential mining revenue would drop by 50%; however, in the previous cases– as the graph above shows – Bitcoin’s price has generally appreciated enough to overcompensate for the block reward decrease. As such, the performance of the crypto asset in 2020 following the “Halvening” should have a significant impact on the success of Bitcoin mining over the next 2 years.


This research note has covered two factors within Bitcoin mining – difficulty and block rewards – to better understand how they are likely to impact the mining industry and the overall Bitcoin market. In our next research note, our research will do a deep dive into quantifying the costs of Bitcoin mining.


The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction.

Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors.

The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.