Crypto CEO: Bitcoin needs a year to recover from Chinese crackdown

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Compute North CEO Dave Perrill told The Block that Bitcoin’s hash rate, a measure of the computational power devoted to mining cryptocurrency, may not recover from the decision of the China to close crypto mining operations before 2022.

“We may not see the hash rate return to its highest level until the second quarter of next year,” Perrill told The Block. “It’s my hunch.” But, of course, he also expects Compute North to contribute to this recovery: the company, which hosts mining equipment for its customers, expects to have a total capacity of 1.2 gigawatts over the next year. year.

Data from Blockchain.com shows that Bitcoin’s hash rate peaked at 180.66 million terahashes per second (THps) on May 13. It quickly fell as China’s crackdown on mining operations spread to more provinces in June, until it stabilized at THps 84.79million in July. 2. Now he begins the slow climb.

Bitcoin’s hash rate is likely to increase as Chinese mining operators sell their equipment or move their businesses to more permissive countries. Mining cryptocurrency has also become easier due to the decrease in the hash rate, which could prompt other people to start their own mining operations, thus increasing the hash rate accordingly.

Efforts to mine Bitcoin using reused hydropower plants, volcanic energy, and other relatively clean sources of large amounts of energy could also help the hash rate start to recover. But Perrill warned that for large-scale operations like Compute North, “it would be a challenge, if not impossible, to be 100% renewable” right now.

It took Bitcoin over a decade to reach the hash rate of 180.66 million THps, it took less than a month for the hash rate to drop below 50% of that peak, and now Perrill predicted it would take a year for him to climb. return to its previous peak. So now the question is how long it can take before the network hits another cliff.

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