The cryptocurrency market is in turmoil again! Just as the price of Bitcoin wobbles above $85,000, a sudden "mining purge" has erupted in Xinjiang, China, turning the entire crypto world upside down! In just two days, the global Bitcoin network's hash rate plummeted nearly 30% like it was on a slide! This cliff-like drop has set a record for the most severe single hash rate contraction since the Bitcoin halving in 2024, it's terrifying!
Xinjiang used to be a "secret base" for Bitcoin mining, relying on cheap coal power and less strict regulatory enforcement, secretly contributing a significant portion to the global Bitcoin hash rate. After the nationwide ban in 2021, it became a "gray paradise," where miners stealthily laid out plans, trying to evade the regulators' "radar." But who could have imagined that this storm would come without warning? The regulatory authorities conducted a surprise inspection, and hundreds of high-performance ASIC miners instantly lost power, with over 400,000 devices forced offline. Industry insiders exclaimed, "total annihilation," with no warning at all; miners could only watch helplessly as their machines turned into piles of scrap metal.
In fact, this raid was not without warning. Last month, videos of mining farms flaunting their wealth were flooding major social media platforms, which alarmed the higher-ups and immediately raised vigilance. With a command from the central government, several provinces simultaneously took action, and the mining farms in Xinjiang were shut down. Previously, China's share of global Bitcoin mining power had returned to over 50%, but now this 'big head' has been cut off, drastically changing the global hash power landscape. Mining pools overseas in the United States and Kazakhstan might be secretly pleased, and they could potentially become the biggest winners.
Then there are those 'photovoltaic miners,' whose situation is even worse. Miners in places like Qinghai previously contracted abandoned photovoltaic power stations, using the decommissioned solar panels and installing energy storage cabinets to keep their mining machines running. Their cost per kilowatt-hour was only 5 cents, and even with the energy storage cabinets, the cost was only 30 cents, much lower than the 1 dollar level in Europe and America. They originally dreamed of making back their investment in half a year with 'huge profits,' but when the regulatory iron fist came down, their mining machines were confiscated, and the power stations were shut down, shattering their dreams in an instant.
Although the Bitcoin network has experienced such a heavy blow, its core mechanism remains quite resilient. The difficulty adjustment mechanism will soon intervene, and in the short term, it might even benefit the remaining miners, causing their earnings to soar. However, this wave of 'China's hash power earthquake' has also sounded the alarm for everyone. Currently, global mining is mostly concentrated in gray areas, and any slight policy changes could trigger a series of reactions. Miners are now faced with a dilemma: should they continue to operate secretly underground, or should they simply venture abroad to seek opportunities elsewhere? This is indeed a tough question!
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