The Founder and CEO of CryptoQuant Ki Young Ju recently highlighted an intriguing trend in the Bitcoin ecosystem that could signal a shift toward the cryptocurrency being used as a genuine digital currency. Ju noted that Bitcoin’s mining difficulty—a key metric in the network’s strength and security—has surged by a remarkable 378% over the past three years. As captured by CryptoQuant’s live chart, the rise reflects growing competition within the mining industry, fueled largely by the involvement of large institutional players. According to Ju, this increased mining activity and difficulty are promising developments for Bitcoin’s journey toward mainstream financial use.
Rising Mining Difficulty and Institutional Influence
Mining difficulty measures the complexity of solving the cryptographic puzzles that verify and secure transactions on the Bitcoin network. As miners add more computational power, the difficulty adjusts to maintain a consistent block production rate. The recent increase in mining difficulty reflects a trend where large, institution-backed mining companies have come to dominate the industry. This shift has made it challenging for individual miners to compete and signals Bitcoin’s increasing integration with the institutional sector.
Ju interprets this institutional influence positively, suggesting it will stabilize Bitcoin’s value, making it a more reliable asset. With higher entry barriers due to institutional backing, Bitcoin’s volatility could decrease, enhancing its appeal as a functional currency. This development may have long-term implications, potentially leading to Bitcoin’s acceptance as a digital currency by the next halving event in April 2028.
Institutional Investments and Mining Sector Growth
On the same day as Ju’s announcement, the crypto mining firm TeraWulf revealed plans to offer $350 million in convertible senior notes, aimed at institutional investors. The move underscores the industry’s growing appeal among established financial players, even with its volatility and regulation challenges. If initial purchasers act within a designated period, an additional $75 million could be raised, which would push TeraWulf’s total fundraising effort to a potential $425 million. Such funding infusions could further concentrate mining power within large-scale entities, accelerating Bitcoin’s path toward a low-volatility asset.
Political Action and Regulatory Influence
Beyond institutional investment, Bitcoin is also benefiting from political backing. US-based mining giants Riot Platforms, Marathon Digital, and CleanSpark recently formed a political action committee (PAC) to support pro-crypto candidates. Their PAC has already launched a $2 million digital ad campaign targeting key swing states, including Pennsylvania and Texas, to rally support for pro-crypto policies. Such political involvement could have far-reaching impacts on regulatory landscapes, paving the way for more stable and widespread Bitcoin adoption in the US.
Ki Young Ju contends that as crypto regulations evolve, major fintech companies will accelerate the adoption of stablecoins. This, in turn, may help to familiarize people with blockchain wallets and lay the groundwork for Bitcoin’s broader acceptance as a currency. He anticipates that by 2030, Bitcoin’s volatility may decrease substantially, allowing it to function as a digital currency as originally envisioned by Satoshi Nakamoto.
The Potential Road Ahead
Bitcoin’s growing integration into traditional finance and politics highlights a significant shift. However, not everyone is optimistic about Bitcoin’s future as a digital currency. European Central Bank economists Ulrich Bindseil and Jürgen Schaaf recently argued that Bitcoin has fallen short as both a decentralized digital currency and a financial asset, pointing to its transaction costs and speed limitations.
Still, Ju remains hopeful that the institutionalization of Bitcoin mining and increased regulation will make Bitcoin a more stable asset. This maturation, he believes, will lead Bitcoin closer to Satoshi Nakamoto’s vision of a “P2P Electronic Cash” system, ultimately realizing its potential as a digital currency by 2030.
The continued rise in Bitcoin mining difficulty reflects growing institutional interest, which could drive Bitcoin toward stability and broader acceptance. Through regulatory support, political action, and continued development, Bitcoin could evolve beyond its current status, edging closer to being widely recognised as a global digital currency. The upcoming halving events will be crucial in this transformative journey, potentially reshaping Bitcoin’s role in the global financial ecosystem.