Bitcoin miners in China aren’t the only ones hit by the country’s high-profile crackdown on bitcoin trading and mining activities last month. The total hash rate of Ethereum, the second-largest blockchain network by market value, also fell sharply in the past month, especially in the past two weeks.
Chinese Miners Mining Uncertainty
Data from Etherscan.io shows the network’s hash rate is increasing before hitting a recent high of 643 tera-hashes per second (TH/s) on May 20.
It was at that time, the Chinese central government, the State Council of China, released a memorandum in which senior officials made comments on the specific crackdown on “Bitcoin trading and mining activities.”
The comment initially caused uncertainty among Chinese miners who did not know when the regulatory hammer fell.
Starting of the Decrease in Hash Rate
In the two weeks following May 20, Ethereum’s network hash rate was relatively stable at 600 TH/s. However, after the Xinjiang government ordered Zhundong Economic Development Zone officials to cut power to the “virtual currency mines” on June 9, it began to see a more marked decline.
On June 18, the Sichuan Xinjiang government followed suit and issued a similar order. This has resulted in most of the mines in the first two major mining areas ceasing to operate.
Ethereum’s network hash rate has now dropped below 500 TH/s, which is a 20% decrease.
In contrast, Bitcoin’s overall hash rate has fallen below 100 exahashes per second, which is almost 50% below its most recent all-time high.
Impact of the Shutdown Order
At the same time, the hash rate of Hangzhou-based Sparkpool (which was once the Ethereum mining pool with the largest real-time hash rate) has dropped from around 150 TH/s more than a week ago to 85 TH/s now.
Additionally, Poolin, a large Bitcoin mining pool in China, also offers Ethereum mining and has stopped paying mining fees to users who have pawned their Bitcoin or Ethereum hash rate tokens. The company said its proprietary Bitcoin and Ethereum mining operations in China have been crippled by the recent government shutdown order.
The decline in the crypto market in recent weeks and the Chinese shutdown order affecting Bitcoin and Ethereum miners have also caused the secondary market for graphics unit processors to cool down.
Data from Manmanbuy, a Chinese mobile app that tracks historical prices of various electronic products, shows that the prices of various GPU models have fallen by 20 to 50% over the past month.