At the end of June, China banned miners from crypto mining in the Sichuan province, which gave out about 15% of the world hashrate.The intensification of repression led to the shutdown of the largest mining pools, and the hashrate of the Bitcoin network dipped more than half from the May highs. Due to the drop in the total computing power, the speed of finding the block in the peak was stretched to 23 minutes. The self-regulation system assumes that a new unit must be assembled within 10 minutes. On July 03, the difficulty of production was recalculated, which fell by a record 27%.
Image source: bitinfocharts.com
North American miners benefited from this:according to the CEO of Compass, the remaining members of the network will receive a 35% increase in profitability. This can last up to 15 months, since the Chinese need time to transport the farms, and there are no new ASICs on the market. The situation will spur the incumbent players to increase their capacities. So, only Marathon Digital plans to deploy an additional 100,000 ASICs by the beginning of 2022, reaching a computing power of 12 EH / s or 15% of the current hash rate.
The only thing that can cool the ardor of mining companies is the further fall of Bitcoin.
Image Source: StormGain Cryptocurrency Exchange
Investment manager Timothy Peterson highlighted the link between price and hashrate, warning of a further drop in Bitcoin. Key date for resolving imbalances: October 31st.
Image source: twitter.com/nsquaredcrypto
However, a quick recovery of the hash rate neutralizesthe risk of continuation of the correction. The fall in the cost of mining stimulates the business to increase investment in mining and thereby restore the total computing power of the network. Marathon Digital is far from the only company with Napoleonic plans, and the queues for ASICs from leading manufacturers still take six months or more.
Analytical group StormGain