The exchange rate of bitcoins has nothing to do with mining difficulty. It is based on supply and demand. On trading platforms like MtGox, people post buy and sell orders at various prices. Let's say that BTC are currently trading for 15 USD. If a bunch of buy orders come in, then all the BTC at 15 USD will be bought up, so the next buyers will have to get BTC that are posted for 15.50 USD, then 16 USD and so on. Conversely, if more people are trying to sell BTC than buy them, then sellers will have to post orders at decreasing prices in USD to get them sold (they are in effect competing to sell their BTC, so naturally the price will go down). Take a look at http://mtgoxlive.com/orders The diagonal lines indicate how many BTC will have to be bought or sold to move the exchange rate to that point. You'll notice some vertical jumps around the whole dollar marks. That's human psychology at work in the market. People are more likely to post a sell order at a round number like 20 USD, although plenty of people post sell orders at intermediate prices. Based on all buy and sell orders, they know exactly how much BTC will have to be bought (or how much USD will have to be "bought" by selling BTC) in order to move the exchange rate to any point.