The real crash of mining in China is having serious repercussions on the price of bitcoin.
Indeed, China is launching a real attack against decentralized cryptocurrencies such as Bitcoin, probably due to the fact that they do not marry with an authoritarian regime that does not tolerate too many freedoms for its citizens.
In fact, decentralized cryptocurrencies are not in fact controllable by the state, and allow those who use them substantially a total financial freedom that can hardly be tolerated by the most authoritarian states.
In particular, the collapse of mining in China is due to the decision to forcibly close mining farms.
To tell the truth, the Chinese state has not tolerated bitcoin mining in the country for years, but it is only very recently that it has launched a real war that is bearing fruit.
The consequences of China’s policies on Bitcoin mining
In fact, according to the data estimated and published by CoinWarz , the Bitcoin hashrate has gone in a few weeks from the all-time high of 191 EH / s on 2 June to the current 99 EH / s, or almost halving compared to the peak at the beginning of the month.
To tell the truth, 191 EH / s had already been reached on 9 May, after a quick recovery from the collapse of 17 April, also caused by China. But then the decline had stopped at 117 EH / s, although a week was enough to recover the previous levels.
This time it’s different, not only because the hashrate has dropped to levels not seen since October 2020, but also because it has been so low for three days now.
In fact, the block time has risen to 13 minutes , compared to an average of 10 minutes, while profitability is not significantly increasing due to the decline in the price of BTC. At the moment, profitability has fallen to the levels of early February, but is still significantly higher than for example a year ago.
These difficulties have thrown some pessimism on the markets, so much so that the price of bitcoin has again dropped to almost $ 31,000 , or a level just slightly above the low of May 19th.
However, the price of BTC has been consistently staying above $ 30,000 since January 3, as it has never dropped below this threshold since.
In addition, several Chinese miners have stated that they are organizing to move elsewhere, so it is possible that over the next few weeks, or perhaps the next few months, the Bitcoin hashrate will return to high levels, particularly if the price should recover by increasing. profitability.