BTC hash rate drops nearly 50% after China cracks down on mining

summary

1. According to Block Research data, BTC hash rate has dropped by nearly 50% in more than a month.

2. The two main reasons behind this are China’s crackdown on mining and the decline in coin prices

The BTC hash rate, or the total computing power used to mine the cryptocurrency, has fallen by 50% in a little over a month.

According to real-time data compiled by the Block, BTC hash rate dropped from approximately 168,000 PH/s on May 15 to nearly 86,000 PH/s on June 23.

Last month, the Chinese government shut down Bitcoin mining in some regions such as Xinjiang and Sichuan, causing a sharp drop in the Bitcoin hash rate. The hash rate in these two regions alone is estimated to be 50 EH/s, accounting for about 30% of the total Bitcoin hash rate.

The Chinese government has taken these radical actions in an effort to reduce its carbon footprint and related impacts on the environment.

The Cambridge Bitcoin Electricity Consumption Index shows that as of April 2020, about 65% of global BTC mining is in China. However, as The Block recently reported, China's dominance has been declining in the past few months, with market participants saying at the time that China accounted for less than 50% of BTC hash rate.

With the recent government crackdown on mining, the share has further declined. The slump in BTC prices in recent weeks is another major reason for the decline in hash rate.

According to data compiled by The Block, the hash rate of most Chinese BTC mining pools has dropped by more than 50% in the past month. For example, the hash rates of AntPool and F2Pool have dropped by 58% and 56%, respectively.

On the other hand, Foundry USA, the mining subsidiary of Digital Currency Group (DCG) that opened its mining pool publicly in March, has increased its hash rate by about 15% during the same period.

Last week, DCG founder and CEO Barry Silbert tweeted that the launch of the Foundry mining pool was just in time, and hinted that it could soon become one of the top five BTC mining pools in the world, currently ranked seventh.

In addition to the United States, Kazakhstan, Russia, and Georgia appear to be attractive BTC mining destinations for Chinese BTC miners. Earlier this week, China-based BIT Mining has shipped some of its Bitcoin mining equipment to Kazakhstan. The company is preparing to ship more mining machines to the country next month.

This article is based on the content of THE BLOCK.