The Bitcoin hash rate has dropped nearly 70% since its all-time high in mid-May. With this latest drop, the hash rate has dropped to the lowest level in two years seen in July 2019.
Still, this drop has brought it to an average block time of more than 23 minutes, from the usual 10 minutes to mine a single Bitcoin block in 2010.
Only 58 Bitcoin blocks were mined during the market. This result represents a 60% drop from the daily baseline of 144 blocks. This result, of course, caused daily Bitcoin miner revenue to drop 80% from $70 million in May to about $12.8 million. Bitcoin miners were earning the same level of revenue as early November when the BTC price was trading around $13,000.
Figure 1. Bitcoin Hash rate
The massive drop in hash rate also causes a significant drop in Bitcoin network activity. The number of active addresses, on the other hand, is decreasing day by day, reaching levels not seen since the beginning of 2019.
Even the fee is extremely low, with average fees currently 0.00021 BTC ($7.12) and have dropped from $62 at the end of April.
After such a drastic drop in the hash rate, a quick difficulty setting is desired, but when the hash rate is too low, blocks take longer, so the difficulty setting takes longer to arrive.
Adjustments are supposed to be made every 14 days, but the last adjustment was 16 days ago. The difficulty setting is expected to experience the biggest drop ever, which should lower block times.
This decline is due to China’s bans on cryptocurrency mining. Such a big drop means that China could be “almost completely off the grid.” According to reports, Chinese miners are migrating overseas. This migration certainly presents a great opportunity for those with access to cheap energy.
According to JPMorgan strategies, “pressure on mining operations in China should be considered positive for BTC in the medium term, as it accelerates the divergence from China’s high share of Bitcoin hashrate and reduces concentration.”