Bitcoin Hashrate Stabilizes After China Crackdown

The Bitcoin hashrate has stabilized after falling for 10 straight days, and industry experts are speculating that the worst fallout from China’s recent mining crackdown might be over.

Bitcoin’s seven-day average hashrate stood at 90.6 EH/s on Tuesday, up slightly from 90.5 EH/s on Monday. The number is still down by roughly half from the peak rate reached in mid-May, according to data from Glassnode. 

The majority of the reduction stemmed from China's move to shut down cryptocurrency mining operations in the country, with a little bit from Iran, according to Sam Doctor, chief strategy officer at BitOoda, a digital asset financial services platform.

“We believe there isn’t much active hashrate left in China,” Doctor said in an email to CoinDesk. "What is left is probably not mining openly, and may continue until either they get shut down or they can get equipment out of China and find an alternative place to move them."

Meanwhile, the mean block time for bitcoin, which measures the length of time it takes to create a new block, has fallen back to 16 minutes, after it surged to 23 minutes on Sunday, the highest level since 2010, according to Glassnode.

Though block time fluctuates naturally, the rise in block time could be a result of Chinese miners shutting down their current operations, according to several mining sites. As the hash power declines, it takes longer for miners to solve the puzzles and create a new block. 

Bitcoin, which is designed to have a target block time of 10 minutes, will see its difficulty level reduced when the block times are greater than expected.

Several data providers estimate the mining difficulty could plunge by up to 25% at the next reset, likely on July 5, which would be the largest drop in bitcoin’s history.