From last Christmas to this Christmas, $BTC 's mining difficulty increased by 36.5%. Over the past year, although the overall price of Bitcoin has declined, the mining difficulty has continued to rise. This precisely highlights a fact overlooked by many: the supply side has not exited due to falling prices; instead, it remains in the game with higher efficiency and greater capital investment.

Hash rate corresponds to already incurred capital expenditures, electricity costs, and long-term operational decisions, which are inherently lagging indicators. The fact that mining difficulty can still significantly increase when BTC prices weaken only shows that the previously invested hash rate has not exited. Miners are choosing to endure cost pressures through efficiency improvements and scale advantages. At least over this year, there has been no systemic, passive hash rate clearing.

More importantly, this divergence indicates that Bitcoin is in a typical phase of supply-side rigidity. New hash rate continues to enter the market, raising the production cost per BTC, while demand has not expanded accordingly. As a result, it’s naturally difficult for prices to trend smoothly.

Therefore, the market characteristics during this phase often manifest as a lack of elasticity in upward movements and difficulty in losing control during declines. It’s more about being repeatedly eroded over time within high-cost zones. To put it simply, the cost of BTC mining is gradually increasing, and the falling prices have not caused panic among miners; instead, they have intensified capital investment in BTC mining.

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