Significant Bitcoin Hashrate Came Offline, Resulting in Major BTC Mining Difficulty Drop

John Lee Quigley, who’s focused on building Bitcoin media and research products at HASHR8 Inc, notes that Bitcoin (BTC) has been trading past the $15,000 mark and appears to be holding its own during the COVID-19 pandemic.

Quigley writes in a blog post that it’s really been an “extraordinary” few weeks and BTC miners seem to have entered “a golden epoch of extremely lucrative mining rewards.”

He adds that these fruitful conditions were “fostered by upper-line revenue and bottom-line costs both improving for Bitcoin miners.” He pointed out that Bitcoin or BTC is trading about 38% higher than it was during October 2020. He explains that this price increase would “typically result in more miners deploying hashrate.” But this recent Bitcoin price appreciation just happened to come around the same time as the end of the rainy season in China’s Sichuan province.

Bitcoin miners in China may have turned off their hardware machines so that they can begin moving out from the Sichuan regions to the coal-powered regions (including Xinjiang and Inner Mongolia), Quigley noted. He also revealed that a significant amount of Bitcoin hashrate came offline, which resulted in the largest difficulty drop “since ASIC hardware began dominating Bitcoin mining and significantly widening profit margins for miners.”

According to the HASHR8 team, Bitcoin market conditions may be considered bullish and seem to be similar to the time when the crypto market reached its all-time highs in late 2017 and early 2018. This time, however, there’s a new type of player that has entered the crypto space, Quigley notes. He claims that in recent months, there have been many different institutions and major publicly listed companies that have been gaining exposure to Bitcoin, the flagship cryptocurrency.

Business intelligence firm MicroStrategy appears to have made it easier for other companies or businesses to follow suit when they notably became the first exchange-listed company to acquire Bitcoin as part of their firm’s asset allocation strategy.

After MicroStrategy confirmed that they bought $425 million worth of BTC to serve as their primary reserve asset, Square announced that it had also purchased $50 million worth of Bitcoin.

Other companies including Stone Ridge Asset Management confirmed their ownership of 10,000 Bitcoin. As noted by the HASHR8 team, a UK exchange-listed company, Mode Global Holdings PLC also revealed that it was planning to invest as much as 10% of its $11.65 million cash reserves into Bitcoin

Going on to share other updates in the crypto space, Quigley noted that Iran would be introducing a federal law that will force approved Bitcoin miners in the country to sell their generated BTC to the nation’s reserve bank. This news first appeared when it was announced by the state-managed Iranian Students’ News Agency.

Iran is currently in a deep recession due to US-led political and economic sanctions which have curbed the nation’s oil exports (among many other trading restrictions).

As noted by HASHR8, Western media has speculated that the recent move to acquire BTC might be an attempt by the government in Iran to cover its growing import expenses. However, the exact details of the new Bitcoin-related regulation are not clear at this time.

(Note: for more Bitcoin ecosystem updates from HASR8, check here.)

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