Bitcoin Mining Recovers to the April Level Despite the Big Crashprevnext

The cryptocurrency market plunged more than 10% on the 20th and 21st. This is because the ‘Hungda Group Risk‘ that occurred in China had a big impact on the stock market and the cryptocurrency market, and the funds escaped from Coinbase in the US. The September market is virtually ending in a downtrend.

However, there are opinions in the mining industry that are observing the recovery. Industry insiders point to the fact that Bitcoin mining difficulty has returned to the April level despite China’s total ban on cryptocurrency mining. The mining farms that had been gathered in China completed their movement to the United States and Kazakhstan in large numbers. Analysts believe that while Bitcoin has fallen to the $40,000 level, it is still increasing its supply as it believes that it is still profitable. In the future, if the supply of Bitcoin decreases due to an increase in mining difficulty, it is predicted that the price of cryptocurrency may rise again.

According to BTC.com, a bitcoin mining pool (mining network) aggregation site on the 1st, the mining difficulty of F2 pool (17.87% of the total mining volume), the world’s largest mining pool, was 22,643 peta per second as of the same day. It greatly surpasses the report on June 21 (11,543 peta hashrate) when the government of Sichuan Province, China, where miners are concentrated, announced all-out measures for cryptocurrency mining. Bitcoin hashrate is the sum of the computational power required to mine Bitcoin. As miners increase the amount of mining, the difficulty increases and the hashrate also increases. If the hash rate continues to rise, the Bitcoin supply will eventually decrease, so it is interpreted as a signal that the price will rise again. This is the basis for analysis that, unlike the market plunge, the mining industry is predicting a cryptocurrency rise to the level of April.

Recently, the hash rate of not only Antpool but also other mining pools is approaching the figure in April, when Bitcoin continued to soar around 80 million won per piece. It is noteworthy that the mining pools that operate the main mining pools at Bitmain (about 40% of the total mining volume), a Chinese cryptocurrency exchange, maintain the Bitcoin mining difficulty. The largest mining pool established from the beginning is Foundry USA (with 8.77% market share).

The industry analyzes that the reopening of the mining pool to the April level means that the mining farms that have largely left China have been transferred to the United States or Kazakhstan. Bitmain, headquartered in Beijing, China, has expanded its facility in the small town of Rockdale, Texas, USA. A mining company called BIT Mining also decided to build a mining farm in Rockdale at a cost of $26 million. China’s bitcoin mining share, which was close to 75.5% in 2019, fell to 46% as of the end of July as miners continued to move to the United States. On the other hand, over the same period, the share of the US increased from 4% to 16.8%, and Kazakhstan also rose to the level of 8%. An industry official said, “Even if the mining pool itself is of Chinese origin, you can participate in the mining pool all over the world.” “The mining industry is becoming global.”

Most bitcoin miners are traded in Shenzhen, China. When miners around the world place an order for a mining rig in Shenzhen, the mining rig manufacturer sends it to the United States, Kazakhstan, Kyrgyzstan, and Russia. It takes at least 2 weeks for the miner to arrive at the mining site. An industry official said, “The price of mining rigs has hardly dropped since June, regardless of new or used equipment. Because they are going out,” he analyzed. In fact, MicroBT’s Watts Miner M30+, which is used as a bitcoin mining machine, has been maintained at the level of $9,000 for 3 months.

The reason why Bitcoin mining farms are relocated to Kazakhstan or Kyrgyzstan is because the tax rate in those areas is low and there is a movement to legalize it by establishing a new ‘cryptocurrency mining business’. In Kazakhstan, the cryptocurrency mining industry is separately stipulated, and the amount of electricity used in the mining industry is allocated every year. Kyrgyzstan imposes a 15% surcharge on mining farms in addition to electricity bills. An industry official said, “If you mine in Korea, you can barely meet the cost level, but even now, even when the hash rate is high, in Russia, Kyrgyzstan, and Kazakhstan, the profit is more than double the cost.”