The miner migration out of China was widely discussed in the market. The migration saw the bitcoin hashrate drop. This was as miners looked for new places to set up their mining operations that had been disrupted with the China ban. Bitcoin spent a stretch of time with the hash rate in the low. Until miners began setting up in new locations. Then hashrate started to pick up again.
While all of the miners are not back online, metrics show that the number is growing. Now, more miners are started to set up operations. A difficulty with mining is energy consumption. For the miners to make a profit, the rigs have to be set up in a location where electricity is cheap. This is why so many mining operations were carried out in China. The country boasts of one of the lowest electricity rates in the world.
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Hashrate Continues To Recover
Bitcoin hashrate experienced a significant crash back in June. Since then, mining difficulty had gone down. Only picking up after more miners began to come back online. Bitcoin hashrate fell below 100 EH/s for June, but 14-day moving averages had started to improve in July. Now, the 14-day moving hashrate has held above 100 EH/s. Resulting in a 25% increase from lows in the previous month.
BTC price recovers above $48K | Source: BTCUSD on TradingView.com
This data shows that 12.5% of miners that had exited out of China were back online. While still a small percentage, it shows that miners are actually finding places to set up their operations. The hashrate recovery has been significant starting from July. Currently, the mining rate is on a 14-day moving average of 126 EH/s.
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The increase in hashrate follows the recovery rate of BTC. Bitcoin price has seen a significant recovery in its price of late. Breaking $50K for the first time since the all-time high in May. As the price went up in the previous weeks, the hashrate had coincided with this. Going up with the price of BTC.
Bitcoin Mining Difficulty Increases
The recovery of the hashrate has also led to an increase in mining difficulty. With the expected difficulty adjustment happening on Wednesday, it will lead to further increase. This will lead bitcoin to experience three consecutive mining difficulty increases. More miners returning back online will cause a continued increase in both hashrate and mining difficulty.
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Rumors are also circulating that Iran will lift its four-month ban on bitcoin mining next month. Iran had placed a ban on bitcoin mining back in May. This was sparked by the blackouts that were experienced throughout the country. Officials attributed these blackouts to mining activities. And thus, banned the mining of crypto in the country. Before the ban, Iran accounted for 4.5% of global bitcoin mining.
Featured image from Finance Magnates, chart from TradingView.com