Bitcoin mining has fully recovered from China’s crypto crackdown that left more than half of the world’s miners in a pinch overnight in mid-May of this year.
Recovery is measured by looking at hashrate, a term used to describe the computing power of all miners in the Bitcoin network. China has long been the epicenter of the crypto industry, with past estimates suggesting that 65% to 75% of the world’s Bitcoin mining takes place in the country.
But after the Vice Premier of China ordered the establishment of a corridor for Bitcoin mining and trading, the main cause of Bitcoin’s price drop of more than 50% from the old peak of 64,000 USD to 30,000 USD, at the same time more than 1 /2 of Bitcoin’s hashrate has dropped off the global network.
As of December 13, data from Blockchain.com shows that the Bitcoin network has fully covered these losses. The network’s hashrate is up by about 113% in five months, showing that Bitcoin has won over China as it has ever been in history.
The increase in hashrate could be a good predictor of the future price of Bitcoin, although BTC is currently down 30% from its ATH of $69,000 over the last month. According to Bitcoin mining engineer Brandon Arvanaghi of Meow, a company that allows corporate treasury to participate in the cryptocurrency market, China’s ban is a very clear buy signal.
However, the greatest value achieved during the whole ordeal is that Bitcoin mining has survived after Bitcoin mining became the biggest tension with China, further affirming the industry’s strong position in the market. overall field.
Interestingly, when Bitcoin crashed in late 2017 and the market entered the long-term winter, there was not much demand for BTC mining farms. But the reality shows that US operators have seen the opportunity and seized the opportunity to deploy and build a domestic mining ecosystem.
The success of BTC miners this year proves it all. Their stock returns have been incredibly performant and completely beat BTC. If the likes of MicroStrategy, Tesla, and Square are all x2 from their initial Bitcoin investment, mining giants Hut 8 Mining Corp, Bitfarms Limited and Riot Blockchain, Inc. increased by 7-8 times.
However, mature capital markets and financial instruments have played an important role in the rapid growth of the Bitcoin mining industry in the US. Combined with the situation that large investment funds are gradually turning away from projects from China, the US has a great advantage to become a new mining center for miners.