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Bitcoin [BTC] hash rate recovers after Chinese exodus

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The hash rate securing the world’s largest crypto-asset, Bitcoin [BTC], saw a significant recovery as it climbed to levels last seen in mid-June this year. As of 15th August, the figures for network hash rate stood at 133.5 exa hash/sec. Over the past 24-hours alone, it was up by almost 11%. Since the 2021 low of just 68 exa hashes per sec [EH/s], the hash rate has grown by over 95%, according to the data compiled by BitInfoCharts.

The hash rate fell drastically after cryptocurrency mining restrictions intensified in China, forcing domestic Bitcoin miners to shift their bases to crypto-friendly nations such as Canada, Kazakhstan, and the United States. The abrupt departure of miners from the grid resulted in the network hash rates slashing more than 60% from an all-time high of 180 exa hashes per second [EH/s] in less than two months.

Since then, several miners have resumed their activities, which was evidenced by the latest uptrend in hash rate after two months of laying low.

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Bitcoin Difficulty Adjustment

Accompanying the Bitcoin has hash rate, the mining difficulty witnessed a considerable spike as well after an adjustment to 15.56 TH for the first time since the second week of June this year.

While the latest surge in difficulty is on the larger side, it isn’t really surprising. However, it is significant since it marks the first visible rise since the Chinese mining ban came into force. A 13.77% increase In the Bitcoin mining difficulty in two consecutive jumps, demonstrates a crucial trend that is currently underway – Chinese BTC miners are finding new bases elsewhere. The subsequent hash rate recovery further validated this thesis.

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Bitcoin [BTC] hash rate recovers after Chinese exodus 4

Besides that, according to several reports, the machines that were brought back online were the same ones that had been plugged in across China. Several miners in the country resorted to selling their equipment rather than moving their bases from China due to a variety of reasons from language barriers to capital constraints.

Bitcoin Mining Difficulty Sees Sharpest Decline of the year

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Bitcoin [BTC] mining difficulty took a sharp decline last weekend after a significant fall in the cryptocurrency network’s hash rate. This marked the largest decline in the difficulty figure this year.

According to the latest stats on the same show that Bitcoin’s mining difficulty had adjusted to 21.05 trillion at a block height of 685,440. This essentially means a fall of 16% since its recently established record high on the 13th of May, which happened to be the last mining date.

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Bitcoin Mining Difficulty Sees Sharpest Decline of the year 6

Accompanying this was the network’s average block production interval which had already taken off to 11.8 minutes 13-21st of this month. Interestingly, this coincided with China’s regulatory watchdogs iterating its previous stance on Bitcoin mining as well as trading activities where it spoke about the necessity for a crackdown of the same in the country.

China and Bitcoin Mining Difficulty

Bitcoin’s network adjusts the difficulty every 2016 block or nearly once every two weeks so that it can exhibit the level of competition between miners of the blockchain. The biggest downward adjustment of the year suggested that the computational effort it takes to mine BTC was less. In short, less competition.

It is important to note that more than 75% of Bitcoin miners that confirm network transactions are based in China. However, a major blow to space was when the Chinese government called for a crackdown on “illegal” securities activities, that included cryptocurrency mining and trading citing risks on the financial stability of the country.

This news was followed by severe bloodshed in the cryptocurrency market that was already struggling after Elon Musk’s announcement of halting BTC payments for Tesla.

Moreover, many crypto mining firms and exchanges began to halt their operations in the country. Huobi, the world’s second-largest crypto exchange by volume was among the first ones to suspend BTC mining services as well the sale of mining equipment.

Following the suit was the popular mining pool, BTC.TOP, a mining pool that soon announced the suspension of its operations in China citing regulatory concerns.