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Bitcoin Hashrate Collapse: How Geopolitics and Weather Are Impacting Miners
Bitcoin Hashrate – Bitcoin’s network hashrate experienced its most significant decline in the past three years between June 15 and Tuesday, according to data from Blockchain.com. The hashrate plunged from approximately 943.6 billion terahashes per second (TH/s) on June 15 to around 799.9 TH/s by Tuesday, marking a drop of over 15%. This sharp decrease has sparked widespread discussion about possible geopolitical, environmental, and economic factors driving the trend.
Iran’s Potential Role in the Hashrate Decline
Many in the cryptocurrency community have pointed fingers at Iran, a country known for its substantial Bitcoin mining operations, as a primary suspect behind this decline. Reports from the National Council of Resistance of Iran in late May highlighted that large crypto mining farms, often run or protected by Iranian state entities like the Islamic Revolutionary Guard Corps, are partly responsible for frequent local power outages.
However, this explanation faces some skepticism. Iran imposed a near-total internet blackout on Friday, allegedly to shield against cyberattacks, according to TechCrunch. This blackout coincided with a drop in global hashrate from 884.6 million TH/s on Thursday to 865 TH/s on Friday, representing a 2.2% decline. Subsequently, a U.S. strike on Iranian nuclear facilities on Sunday reportedly caused further electrical grid failures, coinciding with a 1% fall in hashrate from 869.9 TH/s on Saturday to 860.9 TH/s on Sunday.
Broader Factors Behind the Decline
Notably, only about 3% of the total hashrate reduction aligns exactly with these recent events in Iran. More importantly, the hashrate had already declined by over 6.25% between June 15 and the previous Thursday, prior to both the U.S. strike and Iran’s internet shutdown. This suggests the hashrate drop is part of an ongoing trend, possibly worsened by geopolitical developments.
Additional pressures include rising electricity costs and a severe heatwave in the U.S., which reduces mining efficiency. Increased power demand and soaring electricity prices have forced some less profitable mining operations to pause. For example, New York utility Con Edison urged customers to conserve energy during the heatwave, pushing regional power prices to their highest since January.
Limitations of Hashrate Measurement and Final Thoughts
It is important to note that Bitcoin’s network hashrate is not measured directly but estimated based on block times and mining difficulty. Due to natural variances in mining luck, this estimation carries inherent imprecision.
While the Iran theory remains plausible, many analysts believe the ongoing hashrate decline is driven by a combination of geopolitical tensions, environmental challenges, and economic pressures affecting miners worldwide.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
