Hash Rates of Cryptocurrencies like Ethereum and Bitcoin Recover as Chinese Miners are Redeploying Overseas
The hashing power that secures the world’s biggest blockchains is on its way to making a recovery. Chinese miners were terribly hit by the country’s crackdown on cryptocurrency trading and mining. Now that they have relocated after the crackdown, hashing rates are improving.
The Bitcoin hash rate’s seven-day moving average has slowly gone up. According to The Block’s Dashboard, levels have remained steady at 100 EH/s (exahashes per second) over the last three weeks. When the Chinese government began the crackdown, it first suspended power to crypto mining facilities. The order was given to various provinces’ power stations.
Initially, Bitcoin’s hash rate fell below 90 EH/s, a level that had last been seen around 2020. Considering the slow recovery, the mining difficulty of Bitcoin will see a 4 percent increase in the upcoming adjustment. This comes after having seen four consistent drops since the mid of May.
At the beginning, China’s comments surrounding the crackdown specified Bitcoin mining. However, the orders of shutting down power locally affected other parts of the system. This includes the mining farms that stored graphic cards, as well as ASIC miners that secured the Ethreum network. The unprecedented predicament convinced Ethereum miners to sell their GPUs to others on the secondhand market.
Just as Bitcoin’s hash rate faced a hit, Ethereum’s fell by more than 20 percent after China’s crackdown began. Luckily, it was able to recover to more than 500 terahashes per second.
The rebound in the hash rate suggests that at least a fraction of Chinese crypto miners have relocated. After relocating to new places, they’ve plugged back in and restarted mining operations. One example is that of the Shenzhen-based BIT Mining. It was previously known as 500.com, an online sports lottery firm. As of April, they had more than 50 thousand Bitcoin ASIC miners in Qinghai and Xinjiang. The firm also owned two fully-operational Sichuan mining facilities.
After the crackdown, the miner, which is also listed on the New York Stock Exchange, aimed at minimizing the damage. It stated that by July, it would ship three thousand of its mining units to Kazakhstan. On Wednesday, it posted a statement saying that they’d already started with the plan. Up until now, BIT Mining has shipped and deployed over 3,800 Bitcoin mining units to Kazakhstan. Combined, all the equipment holds a hash rate of 172 PH/s.
To reiterate the firm’s seriousness in implementing a long-term mining strategy, it has exited the lottery business. It made the announcement earlier this week that it will only be focusing on mining from here on out.