Mining revenue for Bitcoin miners has gradually begun to increase two months after the start of the migration process from China in the wake of a massive crackdown on mining activities.
According to recent on-chain data from blockchain intelligence provider, Glassnode, the mining revenue has increased by a whopping 57%, which is similar to the levels recorded in mid-2020.
Earlier in May, the network’s hash rate skyrocketed to peaks of 180 EH/s. However, following the massive crackdown on crypto mining facilities in China, that number slumped by over 50%. Thus, for the first time in about ten years, Bitcoin experienced its longest streak of negative mining difficulty adjustments.
China’s FUD Forces Miners to Relocate
Recall that the Chinese government had mandated every mining facility in the country to stop their operations or risk facing charges.
Several companies in China’s top mining provinces had to halt their services, and most facilities migrated back to Europe and the United States. Nevertheless, the event caused a rapid drop in Bitcoin’s hashrate.
Following the crackdown, mining difficulty dropped significantly, resulting in an immediate boost in profitability for miners located in other countries.
Within the past two months, the hashrate has been progressively climbing back up and is currently at a 25% recovery from the lows in June. This is an indication that approximately 12.5% of the affected miners are back online. At the time of writing, the metric displays a rate of 116 EH/s.
Miners Revenue Back to 8.8 BTC/EH
According to Glassnode, the primary reason for the recent increase can be attributed to the network’s difficulty, which in turn affects the amount of invested power regarding the income of bitcoin miners.
Since the last Bitcoin halving in May 2020, the income of miners has dropped from around 9.5 BTC/EH to a 2021 low of 5.6 BTC/EH in May. However, the China migration, where more than half of the total population of bitcoin miners resided, adjusted the bitcoin mining difficulty and increased miners’ income to around 8.8 BTC/EH.
Over the last two months, the net balance position of mining accounts has increased to over 5,000 BTC/month, which indicates a reduction of selling pressure on Bitcoin’s price.