Hashrate falls sharply in a single day

Bitcoin’s network hashrate fell by roughly ten percent in a single day after a large number of mining rigs were reportedly switched off in China. Jianping Kong a former co chairman of Bitcoin mining hardware firm Canaan said the decline was driven by the shutdown of mining farms in China’s Xinjiang autonomous region.

In a post shared on X on Monday Kong claimed that Bitcoin’s hashrate dropped by around one hundred terahashes per second since Sunday. He attributed the fall to the shutdown of at least four hundred thousand mining machines. His estimate assumes each application specific integrated circuit miner contributes about two hundred and fifty terahashes to the network.

While the claim could not be independently verified Kong’s former senior role at a major Chinese mining hardware producer has lent weight to his assessment.

Data shows notable network impact
According to data from YCharts Bitcoin’s estimated hashrate declined from around one thousand and fifty three terahashes per second on Sunday to just under nine hundred and forty three terahashes on Monday. This represents a loss of more than one hundred and ten terahashes or slightly above ten percent in less than twenty four hours.

It is important to note that Bitcoin’s total hashrate cannot be measured directly. Instead it is inferred from network statistics meaning short term changes can appear dramatic especially when large mining operations suddenly go offline.

China’s complicated role in Bitcoin mining
China has long played a major role in the Bitcoin mining industry though its position has remained unstable. Before 2021 the country accounted for roughly sixty five percent of global Bitcoin hashrate. This changed after the Chinese government moved to ban mining activities forcing many operators to relocate overseas.

Despite the ban mining activity has gradually returned. Data from the Hashrate Index in October suggested that China now contributes about fourteen percent of global Bitcoin mining power. Estimates from CryptoQuant place the figure slightly higher at between fifteen and twenty percent.

A Reuters report published last month noted that both individual and corporate miners continue to exploit access to cheap electricity across China despite official restrictions. Kong criticised this situation arguing that the latest shutdowns in Xinjiang weaken China’s position while benefiting rival countries. He remarked that the United States gains ground in Bitcoin mining without needing to take direct action.

United States accelerates mining expansion
Kong’s comments come at a time when the United States is rapidly expanding its domestic Bitcoin mining capacity. In late August mining firm Hut 8 announced plans to build four new mining sites across Texas Louisiana and Illinois. The projects are expected to add around one point five gigawatts of capacity.

Hut 8 is the parent company of American Bitcoin a mining and treasury firm linked to the Trump family. The company went public in early May following a merger. Its board includes Eric Trump the second eldest son of US President Donald Trump highlighting growing political interest in the sector.

Rising scrutiny of Chinese mining hardware
The United States is also increasing pressure on China’s Bitcoin mining hardware industry. Reports in late November suggested that a leading China based ASIC manufacturer is under investigation in the US over potential national security risks.

Authorities are examining whether the hardware could be remotely controlled in ways that might enable spying or disruption of the US power grid. Any measures introduced could also affect American Bitcoin which recently acquired more than sixteen thousand Antminer units from Bitmain.

Earlier investigations have targeted Chinese chip designer Xiamen Sophgo over alleged links with Huawei a company under US sanctions. In October US customs officials halted the delivery of thousands of Bitmain machines only beginning to release them several months later in March.