What Happened: As Chinese regulators clamped down on cryptocurrency mining, Bitcoin BTC/USD miners in the region were forced to shut down operations entirely.
The resulting impact was a significant drop in Bitcoin’s hashrate, used to measure the amount of power contributing to mining the cryptocurrency, which fell from 150 million TH/s to 90 million TH/s in under a month.
Meanwhile, Bitcoin miners still active in other parts of the world saw nearly a 50% jump in revenue overnight.
According to data from Blockchain.com, daily Bitcoin mining revenue increased from $20 million on July 2 to $29.3 million the next day.
Daily mining revenue now stands at $31.9 million but is being shared by far fewer participants in the mining ecosystem, sending their profitability to new highs.
Why It Matters: Crypto analytics firm Glassnode highlighted the current state of affairs as a “very interesting dynamic” in the latest edition of its newsletter examining the week on-chain.
“The Great Hash-power Migration is underway as an estimated 50% of Bitcoin miners are offline and on the move,” wrote the Glassnode analysts.
“We’re now in a situation where half the network has doubled their income and the other half of the network is essentially producing nothing.”
Read also: Ethereum Could Replace Bitcoin As The Dominant Store Of Value, Says Goldman Sachs
The implications are that operational miners incurring the same OPEX expense but seeing profitability rise almost 2x, approaching similar profitability levels to back in April when Bitcoin was at an all-time high ahead of $64,000.
Price Action: At press time, Bitcoin was trading at $34,312, gaining 1.20% over the past 24-hours.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
