The Bitcoin mining difficulty might drop to early 2020 levels by next month as Chinese miners, accounting for over 70% of the global mining power are packing their bags and moving to crypto-friendly jurisdiction amid the region’s crypto crackdown.
Over the last month, Bitcoin’s hashrate went down from a record 180.7 million terahashes per second in mid-May to around 103.8 million as of 25th June, according to data based on Blockchain.com.
Analysts are now saying that Bitcoin mining difficulty which measures how hard it's for miners to create a new block on the blockchain, might drop to early 2020 levels by next month amid China's crypto crackdown.
Bitcoin mining difficulty is adjusted once in two weeks. The two previous adjustments had resulted in over 16% and 5% drops.
With double-digit adjustments of difficulty (both negative and positive) being both relatively rare, a 21.1% drop might be the biggest drop in Bitcoin’s history.
Over 90% of China’s Bitcoin mining capacity is estimated to have closed. With over 65% to 75% of all global Bitcoin mining taking place in the country, Bitcoin’s price has been in decline, suffering its worst crash.
Meanwhile, the country continues its crackdown on cryptocurrencies, like Sichuan, a popular Bitcoin mining region in the southwest of China ordered energy companies to stop providing power to 26 Bitcoin mining farms in the region by June 25.
Sichuan is the fifth province in the country to announce a crackdown on Bitcoin mining followed by Inner Mongolia, Xinjiang, Qinghai, and Yunnan.
However, the short-term fall in hash rate shall soon be bridged as new mining farms will soon come to life after China’s mining community sets up shop in other countries. In fact, Chinese miners are already relocating to countries like Kazakhstan, the U.S., and even Africa.