Bitcoin’s hashrate has been continuously going down when the miners of the Sichuan area were asked to suspend their mining operations on 14th June 2021. Sichuan is being one of the biggest provinces of China and has been facilitating the largest number of crypto miners in the area as well.
It has been reported that Bitcoin’s hashrate has been continuously going down, which is not a good sign. One of the major reasons is that the crypto mining operations had been suspended by the Government in the Province of Sichuan. A study on the Chinese crypto mining industry was carried out by the teams of Cambridge University. This study revealed that while China is the biggest producer of Bitcoin, it is also hosting the world’s biggest Bitcoin mining industry in Sichuan.
A few days ago, Sichuan’s Energy Bureau and Development & Reform Commission collectively said that they will shut down mining operations. For this purpose, a collective announcement was also made in which it was revealed at approximately 26 mining facilities will be shut down immediately.
Sichuan’s Bitcoin mining facilities are one of the oldest in the world as well. After the creation of Bitcoin in 2009, this particular Province of China was the early facilitator of the Bitcoin mining process. Since then, the Province is over-populated with a large number of miners. But currently, the miners in the area have been forced to leave their facilities and re-settle somewhere else. Some of the miners have told the press that the situation in Sichuan is very serious. Adverse impacts have been witnessed by the major Bitcoin miners such as Binance Pool, Btc.top, Antpool, Huobi Pool, and Btc.com. All of these miners have reported that their hashrates have gone down to red-zone. They informed that in 5 days, a half hashrate has been lost and they have been forced to work on a 50% reduced hashrate.
Obviously, the process of Bitcoin mining has been slowed down considerably which is impacting the demand and supply of Bitcoin. Consequently, the value of Bitcoin is also being severely damaged and has been witnessing continuous lows for past many days. From US$ 40,000, the value of Bitcoin as of today has dropped to US$ 34,000. This is an alarming situation for the entire crypto-economy as the impact would automatically reflect upon other cryptocurrencies as well.
Chinese Government had earlier decided to impose a crackdown upon mining facilities. The policy of mining facilities closure was then adopted by four different provinces of China. The fifth province, which has been working on the same policy, is the Sichuan Province. In all these provinces, the regional authorities have instructed mining facilities to shut down their mining operations forthwith. Failing to comply with the instructions will entail legal consequences.