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Bitcoin hash rate hits 8-month low as Chinese miners power down

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The crackdown on miners in China has yielded results. The hashrate of the Bitcoin network fell to its lowest level since November last year. According to the BitInfoCharts service, on June 20, the hash rate of the main cryptocurrency dropped to 91 Eh/s. On June 21, the hashrate of the coin is 104 Eh / s. The amount of computing power for bitcoin mining continues to decline after reaching a peak (171 Eh/s) in mid-May.

Of course, Bitcoin also reacted sharply to such news from the People’s Republic of China. In 24 hours, the price of the main cryptocurrency fell by more than 6% and approached $33,000. Capitalization fell to $618.3 billion. In just a week, digital currency has already lost over 17% in value.

Ethereum is getting cheaper even faster. The price of “ether” dropped by more than 20% over the week, and over the course of the day, the currency fell by almost 8%. Now the cost of one coin is 2,000 dollars. This is the lowest figure since May this year.

Tightening regulation of mining and crypto trading

The drop in the hashrate of the main cryptocurrency network began after calls from the Chinese authorities to tighten regulation of mining and crypto trading. As such, the hashrate of the Bitcoin network has been steadily dropping since June 14, after miners were ordered to prepare to shut down. According to regional 8btc news, the Sichuan Development and Reform Commission and the Energy Bureau announced that they will shut down 26 cryptocurrency mining projects on Sunday.

Two large cryptocurrency mining companies have already left China – BTC.TOP and HashCow. The crypto exchanges Huobi and Bybit stopped serving customers from mainland China. Experts say that the migration of miners from China in the near future will lead to a sale of cryptocurrency reserves.

A ban on the mining of cryptocurrency has already been introduced in four Chinese provinces: Sichuan, Yunnan, Qinghai and Xinjiang. We will remind, earlier the media reported that the Sichuan authorities will allow the miners to finish working until September.

In addition, the authorities of the Chinese province of Sichuan issued an order to stop supplying mining farms with electricity. The reason was the detrimental effect on the environment.

Miners move to other countries

As of April 2020, about 65% of the world’s Bitcoin mining took place in China, according to the University of Cambridge.

Now some pools have begun to transfer their capacities to other countries. According to experts, North America will become the center of Bitcoin mining in the coming years.

In the long term, most view the hashrate exit from China as positive. A drop in hash rate means less competition among manners.

Meanwhile, the authorities of other countries around the world are inviting miners to launch their points with them. This has already been stated, for example, by the Mayor of Miami Francis Suarez and the President of El Salvador Nayib Bukele. Suarez offered miners cheap nuclear power, Bukele – geothermal power plants with “green” energy, which the country will build on purpose.

Recall that at the end of May, mining was also completely banned in Iran due to the peak season of the load on the electrical networks. Several major cities have already experienced power outages amid rising electricity consumption and droughts that are keeping hydroelectric plants under-operating.

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