China Shuts Down 400,000 Bitcoin Miners Amid Investigations

China’s intervention in shutting down Bitcoin miners has temporarily reduced the global hashrate. Approximately 400,000 machines in Xinjiang are affected amid ongoing CCP investigations into mining operations. Jack Kong, Former Chairman, Canaan Mining, confirmed, “Approximately 400,000 Bitcoin mining machines are now offline in Xinjiang.”

The action stems from operators in Xinjiang promoting activities despite a national mining ban. Bitcoin miners using platforms like TikTok are targeted, causing a notable drop in mining power.

The immediate effect is a reported global hashrate drop of 5.6% to 8%. This underscores the influence of China’s decisions on the cryptocurrency market, particularly affecting Bitcoin.

This could potentially lead to temporary slowdowns in the Bitcoin network and prompt mining power shifts. Global operators may need to adjust as operations realign, possibly outside China.

China’s share of the Bitcoin hashrate has seen significant reductions since the 2021 ban. The network’s self-adjusting mechanism may mitigate prolonged impacts, though sudden movements in the market are expected.

Historically, crackdowns have led to mining operation migrations. There is potential for further reallocation of resources to regions with favorable regulatory environments. These actions may affect Bitcoin prices and future mining efficiencies.