Bitcoin’s mining difficulty has surged to a new all-time high of 127.6 trillion this week. However, the next adjustment, scheduled for August 9, is expected to reverse that trend slightly.
Estimates suggest a roughly 3% decrease in difficulty, bringing it down to about 123.7 trillion. As of now, the average time to mine a block is hovering around 10 minutes and 20 seconds, according to data from CoinWarz.
CryptoQuant data indicates that mining difficulty had already declined in June, particularly toward the end of the month and during the first half of July, hitting a low of 116.9 trillion. Still, the second half of July saw a strong recovery, continuing the long-term upward trend.
Mining difficulty and hashrate—the total computational power securing the Bitcoin network—play a vital role in determining miner profitability and maintaining the asset’s strong stock-to-flow characteristics, which help support Bitcoin’s price by limiting supply expansion.
Understanding Bitcoin’s Stock-to-Flow and Difficulty Adjustment
The stock-to-flow ratio compares the total circulating supply of an asset to the rate at which new units are produced. A higher ratio means the asset is harder to inflate through increased production, which tends to help preserve value.
For example, silver has historically had a lower stock-to-flow ratio than gold. When silver prices rise, miners are more incentivized to increase production, which can flood the market and push prices back down. This is one reason silver lost its role as a monetary standard compared to gold.
Bitcoin, on the other hand, has an even higher stock-to-flow ratio than gold. Around 94% of its 21 million maximum supply has already been mined. Gold has no hard cap and expands at roughly 2% annually.
PlanB, the creator of the Bitcoin stock-to-flow model, points out: “Gold has a stock-to-flow ratio of about 60. Bitcoin’s is around 120. That makes Bitcoin twice as scarce as gold.”
Why the Difficulty Adjustment Matters
Bitcoin’s difficulty adjustment mechanism is what keeps block production consistent, regardless of how much computing power joins or leaves the network. When hashrate increases, the protocol adjusts the difficulty upward to keep block times steady. When hashrate drops, it adjusts downward.
This feature prevents the sudden overproduction of coins, which could destabilize the market. It also ensures that new supply enters the ecosystem at a controlled, predictable rate—critical for maintaining Bitcoin’s inelasticity to miner activity and its scarcity-driven value proposition.
Download the FREE Bitcoin Mining eBook
Kickstart your mining journey with essential insights:
https://bitmernmining.com/landing-page-ebook-download/
For more news, find me on Twitter Giannis Andreou and subscribe to My channels Youtube and Rumble
What is your opinion on this particular topic? Leave us your comment below! We are always intere
