Bitcoin (BTC) started the new week below $90,000 on expectations of a Bank of Japan interest rate hike.
However, Bitcoin didn't just experience a price drop. This week, the Bitcoin network suffered another sudden shock, with the total network hash rate decreasing by approximately 100 EH/s.
Kong Jianping, former co-chair of mining giant Canaan and current head of Nano Labs, drew attention to this decline, stating that Bitcoin's hash rate experienced a significant drop in a single day.
This decrease is approximately 8%, and based on an average hash rate of 250T, it means at least 400,000 Bitcoin mining machines have been shut down.
The founder of Nano Labs cited the closure of Bitcoin mining farms in China's Xinjiang region as the primary reason for this decline. However, Kong Jianping noted that this drop was unusual and added that the exact cause of the closures remains unclear.
However, some experts in the market speculate that the simultaneous closures at major mining facilities in Xinjiang stem from renewed pressure at the local level rather than a new policy change.
Bitcoin has experienced similar drops before. Historical data shows that the Bitcoin network also experienced similar sharp declines, particularly during China's comprehensive mining ban in 2021.
These bans caused a far more dramatic drop in hash rate, but the Bitcoin network proved resilient. As mining operations in China moved elsewhere due to the bans, the BTC hash rate not only recovered but also reached all-time highs.
*This is not investment advice.
