Bitcoin (BTC) started the week below $90,000 on expectations for a rate hike from the Bank of Japan.
However, Bitcoin hasn't just experienced a price drop. This week, the Bitcoin network suffered another sudden shock, reducing the network’s total hash rate by around 100 EH/s.
Gong Jianping, former co-chairman of mining giant Canaan and current head of Nanolab, drew attention to the decline, saying that Bitcoin's hashrate experienced a significant drop in one day.
This reduction is approximately 8%, which means at least 400,000 Bitcoin mining machines have been shut down based on an average hash rate of 250T.
Nano Labs' founder cited the closure of Bitcoin mining farms in China's Xinjiang region as the main reason for this decline. However, Kong Jianping noted that this decline is unusual, adding that the exact cause of the closure remains unclear.
However, some market experts speculate that the mass closure of major mining facilities in Xinjiang is due to new pressures at the local level rather than new policy changes.
Bitcoin has experienced similar declines before. Historical data shows that the Bitcoin network has experienced similar sharp declines, particularly during China's comprehensive mining ban in 2021.
Although these bans caused a significant drop in hashrate, the Bitcoin network has proven resilient. As the ban forced mining operations in China to relocate elsewhere, BTC's hashrate not only recovered, but reached an all-time high.
*This is not investment advice.
