Bitcoin and the hash rate of its network were hit hard when China “banned” mining in the country. The impact of this decision could be long-term, and while it did affect investors, in a sense, miners were the hardest hit. But now the position of the miners seems to be improving, as the “Great Migration” seems to be coming to an end.
1. Bitcoin network
The negative effects of China’s mining ban have been seen for miners as they were forced to seek options outside the country to keep their businesses running. This drop in hash rates between June and July worsened conditions for already worried investors. For now, however, these miners seem to be making a comeback as the hash rate is finally steadily increasing.
An increase in hash rate is a sign that miners who shut down their machines are returning to the network, moving to a more profitable location. The 19% increase also came shortly after the news of the Black Rock Petroleum Company, a Nevada corporation. announced Bitcoin mining agreement. This contract refers to a company operating 1 million mining machines, of which the first 200,000 are installed in Alberta, Canada.
2. Complexity of mining
However, the shift has not yet been completed, as only a part of the absent miners returned. It will take some time for the network to return to its pre-crash hash levels. Full recovery will be confirmed when the mining difficulty returns to the pre-banned range. Mining difficulty is currently at an 18-month low, however, as miners relocate, difficulty levels will recover as well.
3. Miners make a profit
As networking conditions improve, miner’s wallets (the ones that hold money) are also getting heavier. On the 30-day SMA, you can see an increase in miners’ income. Since the beginning of this month, some of the falling revenue has been recovered and it was observed that the trend continues. This is an indicator that now there are good positions not only for investors, but also for miners.
Moreover, this revenue growth is accompanied by a strong accumulation of metrics in the chain. Miners continue to HODL and accumulate additional BTC as selling pressure continues to fall. According to the miner position index, selling pressure is at an annual low, as values above 2 are the threshold for selling. This accumulation makes sense as the 30.25% rise in the price of BTC over the past week only makes their bitcoins more profitable.
Thus, the aforementioned indicators are a strong sign of profitability in the market, at least in the short term. The rise in hashrate and miner revenues is also a good sign for the bitcoin market.