Bitcoin Mining As Profitable As It Was At $55k As China Cracks Down On Tech

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The tectonic shift in mining hash power of Bitcoin has gone up to party level for the remaining miners (aka those in Canada, the US and Russia mainly). With some 50% of global miners now offline (China), those who remain are now seeing profitability rise to levels last seen back in April.

Half of the network

Analytics firm Glassnode explained the current situation in their video newsletter called The Week On-chain, explaining how the remaining miners see the same profitability as if Bitcoin was trading at $55k again.

They said:

We have a very interesting dynamic where approximately 50% of the hash power is currently offline and incurring a great number of costs due to logistics and just simply not hashing, having hardware that’s not currently working, and the other 50% has essentially seen half their competition drop off the network.

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Whilst the protocol’s now issuing the same number of coins as it regularly does, having difficulty wound down, we’re now in a situation where half the network has doubled their income and the other half of the network is essentially producing nothing.

Alibaba and Didi

For anyone thinking that China’s tech crackdown would stop at Bitcoin only, consider the fact that ride-hailing app Didi, the local Chinese rival to Uber, is now also under investigation. It follows regulatory crackdowns by the Beijing government on a number of tech firms, from Alibaba to food delivery service Meituan.

It is clear that the Chinese communist leadership aims to control all companies and technologies that gather data on its citizens (in case of the companies) or that allows for decentralized finance (in case of Bitcoin).