April 15th Price Drop, Hash Rate Drops As Blackouts Instituted In China

[Hydrogen]

Local news outlets have tied a recent dip in the bitcoin mining hash rate to government-instituted blackouts in China.

Regional blackouts instituted in Northwest China may be the cause of a drop in hash rate from several China-based bitcoin mining operations, per local media outlet Wu Talk.



According to a BTC.com screenshot shared by Wu Blockchain, the hash rate of several major bitcoin mining pools has dropped significantly. As of yesterday, Antpool’s hash rate had crashed by 24.5% in a 24-hour period, Binance Pool by 20%, BTC.com by 18.9% and Poolin by 33%.

The blackouts were necessitated because of a “comprehensive power outage safety inspection” in Xinjiang, per the Wu Talk report. Local news outlet Xinhuanet that the National Mine Safety Supervision Bureau has reported three recent coal mine accidents, including an April 10 “water penetration accident” in Xinjiang that caused 21 people to be trapped.

Significantly, the Xinjiang and Sichuan regions of China combined account for more than 50 percent of the overall Bitcoin mining hash rate, according to Primitive Crypto partner Dovey Wan. Operations based in China comprise the majority of global mining power.

This impact that this blackout may have had on Bitcoin’s price, which had recorded a 1.5% drop in value in the last 24 hours, raises questions about the level of centralization of the Bitcoin network's hashing activity.

https://www.nasdaq.com/articles/bitcoin-mining-hash-rate-drops-as-blackouts-instituted-in-china-2021-04-16

....


A thread was posted on this topic in the bitcoin discussion section days ago. It only received a handful of replies. Many are still wondering what caused the drop. Posting this in the hope it helps answer questions.

It should be acknowledged that china has been a prime mover in many of bitcoin's largest price drops throughout history. The big drop around the time of the 1st silk road closing and Ross Ulbricht's arrest could partly be attributed to china banning banks from trading bitcoin in 2013.

It is even possible that china fabricates fake news to negatively influence bitcoin's price. As occurred with false stories of binance offices in shanghai being raided back in 2019.

China may be assuming a softer public tone to minimize negative public backlash associated with their numerous attempts to kill bitcoin's value over the past 10 years. I don't know if they need worry. Most appear to have forgotten china was ever involved.

[1714795312]

1714795312

[bitmover]

The blackouts were necessitated because of a “comprehensive power outage safety inspection” in Xinjiang, per the Wu Talk report. Local news outlet Xinhuanet that the National Mine Safety Supervision Bureau has reported three recent coal mine accidents, including an April 10 “water penetration accident” in Xinjiang that caused 21 people to be trapped.

Significantly, the Xinjiang and Sichuan regions of China combined account for more than 50 percent of the overall Bitcoin mining hash rate, according to Primitive Crypto partner Dovey Wan. Operations based in China comprise the majority of global mining power.

This impact that this blackout may have had on Bitcoin’s price, which had recorded a 1.5% drop in value in the last 24 hours, raises questions about the level of centralization of the Bitcoin network's hashing activity.

https://www.nasdaq.com/articles/bitcoin-mining-hash-rate-drops-as-blackouts-instituted-in-china-2021-04-16

This looks like an amazing buying opportunity in my opinion.

As blackouts were planned by the administration due to recent accidents, there isn't much to worry about. After the safety inspection it is most likely that the power supply will come back as before and hash rate will raise again.

As this problem looks only temporary, hash rate and fees will come back to normal in a few days or weeks.

Everything related to China is commonly misunderstood and generates a lot of  FUD when BTC related.

BTC fundamentals look as solid as ever!

[slapper]

So the blackout had a decent impact on the price of bitcoin, I guess. A huge drop like this is a good indicator for whales to sell their bitcoin to create FUD, especially in the beginning of Q2. After taking profit, many of them may have had collected more and more bitcoin. I'd rather consider this event as a good opportunity to accumulate cheap bitcoin and altcoins.

Speaking of China, I wonder when they will finally ban all activities related to cryptocurrency. They keep strengthen the regulations but I guess it does not make any sense since bitcoin mining farm seems to develop in this uptrend

[Lorence.xD]

So the blackout had a decent impact on the price of bitcoin, I guess. A huge drop like this is a good indicator for whales to sell their bitcoin to create FUD, especially in the beginning of Q2. After taking profit, many of them may have had collected more and more bitcoin. I'd rather consider this event as a good opportunity to accumulate cheap bitcoin and altcoins.

For someone like me who doesn't have a lot of bitcoin, I believe that it is a golden opportunity to buy because you get more value out of your money, and you will get bigger profits in the long-term which is proven already by the price of bitcoin overtime.

[Darker45]

Speaking of China, I wonder when they will finally ban all activities related to cryptocurrency. They keep strengthen the regulations but I guess it does not make any sense since bitcoin mining farm seems to develop in this uptrend

Most likely, China won't "ban all activities related to cryptocurrency." If at all, it might be the other way around. China is apparently getting more friendly toward Bitcoin. While China remains adamant in not accepting Bitcoin as a currency, at least it has already recognized it as an investment alternative. This alone is a very welcome gesture which should somehow send encouraging signals to its local market to consider Bitcoin as an investment option. This will definitely have an effect to the price.

As to the blackouts, I don't think they are a huge problem. As a matter of fact, if this ends up to be recurring and proves to be a bigger problem than what it seems right now then a big exit movement would start. That would still be welcome.

[so98nn]

It’s a great share! Thanks for this as I was wondering myself why the hell my portfolio is so down and why it is always me whenever I invest the crypto goes down. 
Now I know that it’s not my bad luck but it’s a technical glitch in the matrix!! So I’m pretty safe if we consider that this is temporary problem. Once the mining operations restore themselves to the original values it would just pump the whole crypto currencies to all new level. There will be surge for the buying and FOMO investment as the change would be major.

Definitely this one is not Chinese plot, from the news it’s clear that they wanted to do proper auditing of their infrastructure. Nothing bad in that considering the safety protocols.

So yeah, we are pretty good to go for the next pump soon. 

[Snappycoco]

Good day to buy the dips I believe. Probably price would be back in a week or two with higher ATH aims. I thought for a day that these drops were caused by pretty big company who sells off their coins and taking profits.

[elda34b]

It’s a great share! Thanks for this as I was wondering myself why the hell my portfolio is so down and why it is always me whenever I invest the crypto goes down. 

Doing a DCA might help with that feeling. Just buy regularly and forget it for a few months or years. History showed that you could gain a lot of money doing DCA instead of trying to swing trade your bags.

[davis196]

OP,I don't get your theory.
So you think that a power outage,which was caused by coal mine accidents means that China tries to crash the Bitcoin price?This doesn't make sense.
Are the coal mine accidents real or the Chinese government is fabricating an excuse,in order to shut down power supply to the Bitcoin miners?
I do believe that the coal mine accidents are real,which means that this hash rate drop(and price drop) isn't caused deliberately by the Chinese government.However,the possibility of China attacking cryptocurrency mining remains.

[ashmodeus]

OP,I don't get your theory.
So you think that a power outage,which was caused by coal mine accidents means that China tries to crash the Bitcoin price?This doesn't make sense.
Are the coal mine accidents real or the Chinese government is fabricating an excuse,in order to shut down power supply to the Bitcoin miners?
I do believe that the coal mine accidents are real,which means that this hash rate drop(and price drop) isn't caused deliberately by the Chinese government.However,the possibility of China attacking cryptocurrency mining remains.

i dont even know what u talking about, what coal mine you mean ?, well, about price, since the beginning , HashRate of mining its represent the price of bitcoin. to make it simple , hashrate is a kind of production cost in normal mining, the more miners are operating, the bigger the hashrate is created and it requires high production costs for the tool and its electricity, and of course bitcoin more valuable because it.

[ReiMomo]

This has been expected honestly. Since before that their energy company noticed the shortage, they were actually complaining in their community as it would affect their hash rate big time.

It just hurts that the location where the accident happened is the same location where the miners are located. Very unfortunate for the community. 50% is too much and will definitely cost a fortune. I guess if they could find alternative energy to provide power to the mining equipment would definitely reduce the risk at least.

[Lucius]

First of all, this kind of drop is always a good opportunity for all those who mostly complain that the price is too high, and there are a lot of them. Secondly, what has happened in China is a very good warning that something must start to change regarding the decentralization of hash power - which means that it might not be a bad thing for the Chinese authorities to gradually make life harder for local miners - whether it is done about denying them electricity, making it impossible for them to sell BTC via OTC, or banning mining altogether in some parts of China.

Only when China is at max 20 hash power will it no longer matter to us what is happening there, and until then the whole world has its eyes fixed on that part of the world because they are afraid of the moves of the Communist Party. However, the situation seems to be changing a bit because according to some data, the largest percentage of mining equipment is sold outside China.

[jaysabi]

A thread was posted on this topic in the bitcoin discussion section days ago. It only received a handful of replies. Many are still wondering what caused the drop. Posting this in the hope it helps answer questions.

It should be acknowledged that china has been a prime mover in many of bitcoin's largest price drops throughout history. The big drop around the time of the 1st silk road closing and Ross Ulbricht's arrest could partly be attributed to china banning banks from trading bitcoin in 2013.

It is even possible that china fabricates fake news to negatively influence bitcoin's price. As occurred with false stories of binance offices in shanghai being raided back in 2019.

China may be assuming a softer public tone to minimize negative public backlash associated with their numerous attempts to kill bitcoin's value over the past 10 years. I don't know if they need worry. Most appear to have forgotten china was ever involved.

This is entirely giving China too much credit for price crashes. First, how is silk road closing partly attributable to China banning banks from trading Bitcoin? You'll have to explain that one for me because I don't see the connection.

Second, no, China is not fabricating news to negatively influence Bitcoin's price. Every time the price falls, it's not because of a conspiracy.

Third, why would the hash rate falling affect the price of bitcoin? It doesn't seem likely to be a cause and effect relationship.  The hashrate falling could only possibly affect supply for a maximum of 2 weeks before the difficulty is readjusted, and even then would only result in slightly less Bitcoins being produced than it would have otherwise, and it and I don't see why falling hash rate would affect demand.  Seems like these are only correlated by happenstance and not cause.

[el kaka22]

"Decentralized" , yeah right. China controls so much of the mining power in the world and that results with most of the hashes coming from them and being able to do something. Sure when miners want to change something that's not enough because all the transactions should be from miners and we know that it is not, there are tons of other people. Remember back in 2017 or something miners wanted us to not have Segwit and we still went with it and they created BCH to compete with Bitcoin and they failed miserably as you can see these days. Which means miners do not have that much power.

However if they want to they could play with the price, just close all the shops in china for one week and price of bitcoin will be under 40k and they can buy with all of their profits and then start back up and increase the price and it will profit them even more, that's horrible.

[dothebeats]

Were there any follow up reports to the inspection and the blackouts? I don't see its connection to the price drops, but certainly on the drop on hash power. There really isn't a clear line that connects what transpired on the 15th and what happened on the Xinjiang province, so I don't know if the thought that China is at it again on price manipulation is something really credible.

If the miners are experiencing constant power interruptions, maybe it's best to send off the equipment somewhere and start anew. It relieves the centralization issue and it eliminates the threat of government intervention in the future.

[hatshepsut93]

Wasn't there like 2 days between the hashrate and price drops? If there was some connection, it would have happened immediately. Like when that fake rumor appeared about the US investigating money laundering with cryptocurrencies, the price started dropping very quickly. Bitcoin's price isn't strongly connected to hashrate, we're still very far from 51% being viable economically even after this decrease, which is going to be only temporary anyway.

[milewilda]

"Decentralized" , yeah right. China controls so much of the mining power in the world and that results with most of the hashes coming from them and being able to do something. Sure when miners want to change something that's not enough because all the transactions should be from miners and we know that it is not, there are tons of other people. Remember back in 2017 or something miners wanted us to not have Segwit and we still went with it and they created BCH to compete with Bitcoin and they failed miserably as you can see these days. Which means miners do not have that much power.

However if they want to they could play with the price, just close all the shops in china for one week and price of bitcoin will be under 40k and they can buy with all of their profits and then start back up and increase the price and it will profit them even more, that's horrible.

Some sort of monopoly? Im aint surprised even though it cant really be fully controlled but we arent blind on not to notice on how China did really make out some impact
on just simply having that hashrate drop due to Blackout but doesnt mean that this is completely over.If you are just making out investment then these are the times
which can be considered to be a sweet spot for you to take, wait for a bit more until the price on a potential bottom because once these things
get normalized then you would really be expecting for some change trend once again.

[Hydrogen]

OP,I don't get your theory.
So you think that a power outage,which was caused by coal mine accidents means that China tries to crash the Bitcoin price?This doesn't make sense.
Are the coal mine accidents real or the Chinese government is fabricating an excuse,in order to shut down power supply to the Bitcoin miners?
I do believe that the coal mine accidents are real,which means that this hash rate drop(and price drop) isn't caused deliberately by the Chinese government.However,the possibility of China attacking cryptocurrency mining remains.

The Suez Canal has not experienced a serious blockage in decades.

Bitcoin mining has not experienced a serious power outage in more than 10 years of operation. Operations being industrial in nature. They might have backup generators which would activate and provide electricity in an emergency. Suddenly these extreme and perhaps improbable events are becoming normalized. But are they normal.

There is a chance that china deliberately ordered mining operations to shut down. To use it as an excuse to highlight how 30% of bitcoin mining is powered by coal. This is the fault of the state for subsidizing coal power. If subsidies weren't involved miners would use hydroelectric, wind or solar. They're cheaper and more affordable.

If anyone should be held accountable its subsidized coal. Crypto mining is an industry which would overwhelmingly be powered by environmentally friendly power. Subsidized coal pays crypto miners extra money to power their operations using dirty coal based energy instead.

Second, no, China is not fabricating news to negatively influence Bitcoin's price. Every time the price falls, it's not because of a conspiracy.

The evidence says the opposite.

Many of bitcoin's largest price drops can be traced to negative news related to china.

China apologized and took a softer stance on bitcoin. They're guilty. They don't want hedge funds, banks and whales invested in bitcoin to retaliate against them for crashing the price.

[btc-room101]

OP,I don't get your theory.
So you think that a power outage,which was caused by coal mine accidents means that China tries to crash the Bitcoin price?This doesn't make sense.
Are the coal mine accidents real or the Chinese government is fabricating an excuse,in order to shut down power supply to the Bitcoin miners?
I do believe that the coal mine accidents are real,which means that this hash rate drop(and price drop) isn't caused deliberately by the Chinese government.However,the possibility of China attacking cryptocurrency mining remains.

The Suez Canal has not experienced a serious blockage in decades.

Bitcoin mining has not experienced a serious power outage in more than 10 years of operation. Operations being industrial in nature. They might have backup generators which would activate and provide electricity in an emergency. Suddenly these extreme and perhaps improbable events are becoming normalized. But are they normal.

There is a chance that china deliberately ordered mining operations to shut down. To use it as an excuse to highlight how 30% of bitcoin mining is powered by coal. This is the fault of the state for subsidizing coal power. If subsidies weren't involved miners would use hydroelectric, wind or solar. They're cheaper and more affordable.

If anyone should be held accountable its subsidized coal. Crypto mining is an industry which would overwhelmingly be powered by environmentally friendly power. Subsidized coal pays crypto miners extra money to power their operations using dirty coal based energy instead.

Second, no, China is not fabricating news to negatively influence Bitcoin's price. Every time the price falls, it's not because of a conspiracy.

The evidence says the opposite.

Many of bitcoin's largest price drops can be traced to negative news related to china.

China apologized and took a softer stance on bitcoin. They're guilty. They don't want hedge funds, banks and whales invested in bitcoin to retaliate against them for crashing the price.

Your partially right, but like the blind men with the elephant, sort of wrong.

COAL is a major problem, but the real problem is historically in CHINA from the begin the miners were near HYDRO, but in recent years everywhere here in ASIA, the rivers are running dry
In order to keep these miners running, and remember we're talking about the equivalent of entire country of power wasted like say Argentina, in terms of powering these BITMAIN miners that burn 3,000KWH each, and they can be lined up to the moon.

Something has to be done, in order to mine bitcoin do we kill everyone in CHINA with smoke from coal??

I know the BITCOIN community don't care about human life, they only care about HODL, and mis-information and lies and get rich quick.

The CCP has to make a decision, they go slow. Jack Ma owner of ANT ( all hw & mining ops ) is under house-arrest, CCP has taken over in the coming months we'll learn what they intend to do with the BITCOIN "PROBLEM".

[btc-room101]

"Decentralized" , yeah right. China controls so much of the mining power in the world and that results with most of the hashes coming from them and being able to do something. Sure when miners want to change something that's not enough because all the transactions should be from miners and we know that it is not, there are tons of other people. Remember back in 2017 or something miners wanted us to not have Segwit and we still went with it and they created BCH to compete with Bitcoin and they failed miserably as you can see these days. Which means miners do not have that much power.

However if they want to they could play with the price, just close all the shops in china for one week and price of bitcoin will be under 40k and they can buy with all of their profits and then start back up and increase the price and it will profit them even more, that's horrible.

It's not horrible, its a fact of life.

BITCOIN has evolved from an anti-government defiance to FIAT to just another scam to depopulate the earth and murder people, just like FIAT. Who would have known, who could have thought?

I do agree, that BCH was fascinating to watch, and (ant/baba/alibab/jacki-ma) BITMAIN tried really hard, buy accepting BCH as a payment for BITMAIN miners, but that was four years ago. I think today CCP in control, they can do as they with with BTC given they control +67% of the mining on earth.

CCP has every right to do with BITCOIN as they wish, its their country that's getting polluted, they own the hardware, they make the hardware, they run the majority of miners. They OWN BITCOIN.

I too don't give a rat's ass about Bitcoin prices, but Peter Theil last month came out and warned the world that CHINA's ownership of bitcoin was going to bring big problems, and now they're here.

I'm glad one person on this site, comes clean and admits the "CHINA" problem, I have been aware forever of this 'problem', but it often seems that this site is just a CHINESE disinformation site to downplay the truth. The truth of course is that BITCOIN has made 1,000's of Chinese rich, but mostly by scams, even todays Alibaba scams people on miners that don't even exist takes orders and collects fee's that will never be returned, as the miners ( and graphics cards will never be shipped )

IMHO the real turn was Trumps Tariff's, that seems to have turned the attitude of always giving the west, the benefit of doubt, which is why I suspect that CORE won the last battle(BCH), but you aren't going to win anymore battles. It's clear that CHINA is now going to flex its muscles.  CHINA is going to use its monopoly advantage.