New miners profit from BTC’s hash rate drop and China’s mining ban
In May 2021, a massive cryptocurrency crackdown happened in China: the government banned cryptocurrency mining in four major provinces. The clampdown led to the forced relocation of a solid number of both Chinese and international digital assets companies and brought about a drop in the bitcoin hash rate by more than 50%.
The Chinese government’s ultimate ban on financial institutions, including banks and online payment channels for applying cryptocurrency, then echoed around the world and hit the news reports of multiple crypto websites. According to Kevin Zhang, Vice President of Business Development at Chinese crypto company Foundry, by the end of June 2021, about 90% of Chinese miners were forced to completely stop mining digital assets.
What is the situation like today, and why might it turn beneficial for Bitcoin in the long term?
Following the official announcement by the People’s Bank of China, issued on June 21, 2021, and directed to several major financial institutions in the country, the BTC market has lost significant gains. At the same time, the hash rate drop of more than 50% (which is a record for the last 2 years) has greatly reduced the mining difficulty indicators, which are in direct proportion to the hash rate.
On the one hand, the drop in the BTC’s hash rate and the recalculation of the network’s difficulty negatively affected the global crypto market; yet on the other hand, they induced a stable increase in the profitability of the cryptocurrency and thus created stimulating conditions for attracting new users. So today there are far more opportunities for new miners to make a profit, which can justify the significant costs of purchasing equipment, renting a suitable site, and servicing. Similarly, the current situation has proved beneficial not only for industrial-scale mining – newcomers to crypto mining will find themselves in a milieu of reduced risks and increased profits.
That is why we strongly advise all those who have long wanted to delve into crypto-mining not to miss this great chance and install the CryptoTab Browser now for stable long-term extra income.