The mining hashrate of bitcoin has hit a 13 months low following the increased decline in mining activity in China.
The total hashrate on the bitcoin network currently sits at 101.9 TH/s. The last time the network saw a hashrate that low was at the beginning of June 2020.
The mining hashrate represents an important security metric for the blockchain. The more hashing power in the network, the more secure its overall resistance to attack is. The estimated hashing rate decline can strongly be attributed to the recent Chinese bans on bitcoin mining.
China mining ban a key reason
Recently, China has taken great steps to curb mining of bitcoin in the country. China has also prohibited financial institutions from using crypto services. Bitcoin miners in China have already shut down mining operations, with the majority of them looking for greener pastures to continue mining bitcoin.
BIT mining has begun moving its operations to Kazakhstan. BIT mining was originally based in one of China’s bitcoin mining capitals, Sichuan. However, the company has escalated its efforts by shipping over 320 mining machines to its new location. The company is looking at sending over an additional 2,700 mining rigs before the end of the month.
The trillion-dollar mistake
The move by China has had a devastating effect on the mining industry in the country. Essentially ending the country’s reign on the mining sector.
Bitcoin maximalist and CEO of MicroStrategy, Michael Saylor recently commented on the country’s move, calling it “a trillion-dollar mistake.”
He added, “China had 50% market share of bitcoin and they were generating $10 billion a year, in a business that was growing 100% a year, year-over-year.”
The crackdown in China has not slowed down MicroStrategy’s desire to own more bitcoin, as the company purchased a further 13,005 BTC this week.
Lower hashrate not bad for bitcoin
BeInCrypto’s latest on-chain analysis covering the declining hashrate acknowledged that while the hashrate and active addresses have been declining since the recent all-time high of $64,800, the network is still seeing user growth.
Accumulation continues as holders buy more bitcoin, liquidity also appears to be declining, insinuating that there could be a reversal of the downward trend soon.