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Bitcoin Hash Rate Drops 50%, Chinese Miners “Not Even In The Mood To Drink”

You may have noticed that China is currently taking a hard line against bitcoin mining. Many Chinese mining companies have had to close their doors in recent times and that probably contributed to the recent crash in prices.

Especially the recent closure of the mining companies in the Sichuan province caused a big blow. In this region, Chinese miners used to cheaply buy surplus power from a hydroelectric plant during the rainy season.

According to data from Bitinfocharts, the so-called hash rate, or computing power, of the Bitcoin network stands at 87 exahashes per second (EH/s) today, compared to 171 EH/s a month and a half ago. That is a drop of no less than 50% and the lowest in eight months.

Kevin Zhang, vice president of US Foundry, one of the largest mining companies in the world, says mood has turned sour among miners in China. The reality that this may be the end of crypto mining in China is starting to set in, the country was previously estimated to be responsible for 65% of all mining in the world.

“The sentiment is clearly quite bleak and the reality is that mining in China is the end of the story. Some miners have lingered in Sichuan since the Bitmain conference to drink their grief away. Now they are not even in the mood to drink.”

He adds that 70% of mining capacity in China is already offline and will be closer to 90% by the end of the month. In some cases, companies were even ordered to remove all infrastructure within a few weeks. He calls it an “extra kick in the nuts” as these companies had the proper permits to operate.

Zhang warns that the major migration of miners abroad may be “anything but seamless”. Hosting capacities are already scarce, can take months to build and there is still a 25% tariff between the US and China. However, some companies have already started to relocate. BTC.com, one of the larger mining companies, has already partially relocated to Kazakhstan.

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