While several Bitcoin miners have been badly hit by China’s decision to crackdown on mining operations, Ethereum is also feeling the heat. The total hash rate of the Ethereum network has witnessed a sharp decline over the past month, recording a particularly steeper drop in the past two weeks.
Data on Etherscan.io reveals that the network’s hash rate was on an upward trajectory since January 2020. It eventually reached a peak value of around 643 terahashes per second (TH/s) on May 20. However, the network’s hash rate began dropping in late May, coinciding with a comment from the Chinese State Council meeting about cracking down on “Bitcoin trading and mining activities.”
The singular comment from the memo kick-started a cloud of uncertainty among Chinese miners and the entire crypto community. Since then, the crypto market has struggled to recover from the comment, which has now metamorphosed into an actual crackdown.
Ethereum’s hash rate remained relatively constant for about two weeks after China’s announcement in late May. By June 9, it began to drop sharply following an order from the Xinjiang province asking officials in the Zhundong economic development zone to immediately shut down all "virtual currency mining farms." This was followed by similar crackdowns from the Sichuan and Qinghai provinces in the weeks to come.