Bitcoin mining hashrate hits new yearly high seven months after China’s dreaded crypto crackdown

Bitcoin mining neared its May 21 record highs Thursday, seven months after crashing due to China's blanket ban on crypto mining.
Bitcoin mining neared its May 21 record highs Thursday, seven months after crashing due to China’s blanket ban on crypto mining.

PUNE (CoinChapter.com) — Bitcoin mining neared its May 21 record highs Thursday, seven months after crashing due to China’s blanket ban on crypto mining. The uptrend surfaced as cryptocurrency miners decided to move to new, more crypto-friendly geographies.  

China is no longer the Bitcoin mining mecca

The Bitcoin hash rate, a measure to determine how resource-intensive it is to create new coins, has risen to 172m terahashes per second(TH/s) from the July low of 84.79m TH/s. The astounding growth suggests that the Bitcoin mining industry has been dedicating more computing resources to crack complex blockchain algorithms, with much more efficient machinery, in countries offering a suitable work environment.

Bitcoin Hashrate historical chart. Source: Bitinfocharts.com
Bitcoin Hashrate historical chart. Source: Bitinfocharts.com

“China banning mining merely prompted a geographic shift . .  we view this [move] towards other countries, including Canada and the United States, as a net positive,”

said Jason Zaluski, head of technology at Toronto-headquartered Hut 8 Mining Corp.

The geographical rejig only unlocked a windfall for the Bitcoin mining companies in the US and elsewhere as activity relocated to new facilities in countries offering cheap sources of energy, such as the US, Iceland, Norway, Canada, and Kazakhstan.

As a matter of fact, the U.S. emerged as the world’s largest base of dedicated mining resources for digital assets, growing 428% from September levels, according to data from the Cambridge Centre for Alternative Finance.

Fresh hashrate forecasts

Marathon Digital, a US-listed miner, forecast it would hit record levels of the Bitcoin mining supply by the middle of next year when a newly-built renewable energy site in Texas becomes available to more miners. Riot Blockchain, another Nasdaq-listed miner, also raised its hash rate forecasts for next year as a new facility in Colorado goes online.

Bitcoin Mining, Bitcoin mining hashrate hits new yearly high seven months after China’s dreaded crypto crackdown
China’s mining crackdown shifts the industry elsewhere. Source: Statists

Most of the recovery is attributable to new-generation equipment coming online, not the relocation of equipment from China, where much of the equipment was too inefficient to keep operating in new locations. The shutdown of the industry in the Asian country has forced companies to switch on more efficient equipment, which boosted the Bitcoin mining hash rates.

However, despite the bounceback, China’s ban has had a lasting impact because the rate of production would be even higher without the country’s clampdown. The recovery hash rates were “far below what it would have been but for the China development”, cited Bitfury, one of the world’s largest mining companies globally.

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Bitcoin Mining, Bitcoin mining hashrate hits new yearly high seven months after China’s dreaded crypto crackdown

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