- The Chinese ban continues to gain momentum this year, leading to a sharp crash in the price of cryptocurrencies in June.
- A reduced hash rate as low as 69Eh/s in June is long behind the market, as the hash rate surged 128% in 83 days to 174Eh/s.
- Bullish investors are back in the winning corner as Bitcoin seems set to soar with many wild upward price predictions.
- Crypto enthusiasts worry whether the effects of the Chinese ban are over and if miners migrating did the trick.
This year came with a lot of positives for Bitcoin and the crypto market, as mass adoption of crypto and DeFi was expected across several regions. Unfortunately, although we began to see the mass adoption happen in all sectors, China struck with its crypto clampdown.
The price of Bitcoin and other cryptocurrencies was on a massive bull run, with Bitcoin hitting over $64,000, ETH climbing to $4,000, and other impressive outcomes from other coins.
The Chinese Ban and Falling Hash Rate
China has been in the news this year for its anti-crypto regulations. After most Chinese cities failed their climate control goals, China put more pressure on miners, leading to a reduced hash rate in Bitcoin: the perfect recipe for a crypto disaster.
The ban of mining activities in most Chinese cities was coupled with other cryptocurrency bans coming out of China.
The People’s Bank of China restricted accounts and transactions involving cryptocurrencies, and social media accounts with mining or other crypto-related posts were flagged on Weibo (NASDAQ:WB).
As the miners moved out, the Bitcoin hash rate dropped to as low as 69Eh/s in June, leading to a price crash for Bitcoin. The price of Bitcoin fell as low as $30,000 and struggled to gain ground for months. The hash rate of Ethereum was also affected by the Chinese ban, dropping to 504TH/s.
Bitcoin’s Hash Rate Surges, Difficulty Also Expected to Rise
The Chinese ban led to the migration of miners away from China to other friendly regions. While many expected the effects of the Chinese ban to last longer, the effects are behind us as the Bitcoin hash rate has been on a consistent rise since June 28.
The hash rate, which is a measure of computing and processing power of the Bitcoin Network, is closely tied to the price in many ways.
The Bitcoin hash rate has been on the rise in recent weeks, climbing up to 128% in 83 days. The hash rate has been rising as more miners have popped up in other parts of the world.
The current hash geographics puts America as the leading Bitcoin mining region as opposed to China, which was number one for a long time. The US now mines 35% of the world’s Bitcoins.
The rise of the Bitcoin hash rate has seen it go as high as 174 exahash per second. The current Bitcoin hash rate is 158EH/s, while Ethereum has also been on the rise and currently sits at 740Th/s.
As a result of this, the Bitcoin difficulty is expected to rise again. Bitcoin difficulty growth is projected to be up about 3.2% in a few days, taking it up to 19.06 trillion. Bitcoin difficulty, which was at 20 trillion earlier this year, is currently at 18.42 trillion.
On The Flipside
- The Chinese ban still has lingering effects on many investors, leaving them wary of the crypto market.
- The rise in the Bitcoin hash rate and difficulty is still shy of the rates earlier in the year
Bitcoin’s Price Surge and What’s Next For the Crypto Industry
Bitcoin has been on a price surge in the past weeks, going over the $55,000 level. This recent rise has brought back hopes of the top crypto hitting $100,000 as projected earlier this year before the market down.
The price of Bitcoin traded a little above $40,000 on September 29, and has since then gained over 27% as it continues to drive up momentum to the delight of bullish investors. The upturn in Bitcoin price is closely related to the hash rate as miners have relocated to more friendly jurisdictions.
The rise in the price of Bitcoin will affect the prices of other coins as more investors will jump on the moving train, especially in DeFi.
Furthermore, as crypto and DeFi boom again, there should be a spread in the mining power around the world as another crypto mining monopoly may lead to another problem in the future.
Why You Should Care?
Bitcoin is the leading cryptocurrency in the market, so its price has sentimental value in the eyes of many traders in the market. Moreover, the rise of the Bitcoin hash rate means a resurgence in Bitcoin mining hubs, and the price could be set for another massive rally.
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