- The Bitcoin hashrate has recovered after a 50% drop over the weekend
- The dip was probably caused by more Chinese Bitcoin miners shutting up shop
- The Bitcoin hashrate is now at September 2019 levels
The Bitcoin hashrate has rebounded to 86 million terahashes per second (TH/s) after crashing to 58 million over the weekend, suggesting that the floor might be in following China’s crackdown on Bitcoin mining operations. Having been on a gradual uptrend since December 2018, the collapse in hashrate is stark, with almost two years’ worth of gains erased in two months, but the quickfire 53% gain shows that a reversal may be in effect as China finishes the great switch off.
Bitcoin Hashrate Almost as Volatile as Price
The Bitcoin hashrate is usually a fairly placid metric, with deviations rarely more than a few percent on a weekly basis. However, the chart from April this year onwards has been almost as volatile as the price itself:
Source: Ycharts
The volatility has been caused first by the energy blackouts in key mining locations in China followed by China’s ban on Bitcoin mining a month later. This has led to a huge number of mining farms halting operations and either moving abroad or packing up entirely, which has been reflected in the hashrate collapse since May:
Miners Coming Back Online?
Chinese Bitcoin miners have had two weeks to close down operations, and it seems that the majority of those left operating chose this weekend to do so. This would explain the drop from 109 million TH/s to 58 million TH/s, while the instant 53% bounce is likely representative of others taking their place of, more likely, many of those who moved locations coming back online.
We know for example that Kazakhstan and the United States are two areas where large scale Bitcoin mining operations are relocating to, while other miners may have been able to bring extra resources online from Monday. It is too early to tell whether the recovery in Bitcoin hashrate is the start of an overall recovery or just a brief respite before further downward movement, but a jump of such magnitude is a good sign.
