While the hashrate typically follows the price, the decline across May to June 2021 was attributed to the crackdown on crypto mining in regions across China.
The Asian nation had long been the epicenter of bitcoin miners, with past estimates indicating that 65% to 75% of the world’s bitcoin mining happened there. This forced miners to close or migrate their operations to friendlier areas across the world.
For instance, the hashrate fell from 112.625 EH/s to 91.2189Eh/s two weeks after mining was banned in the Chinese hot spot of Sichuan province on 19th June 2021.
Below are the previous drops experienced in the May – June 2021 period.
June 3, 2021 – 28% drop
May 29, 2021 – 16% drop
June 13, 2021 – 5% drop
The recovery of the hashrate means the network is much more secure and harder to attack.
This is also an indicator that migrators are consolidating back on the network, which is expected to increase demand for blocks to mine, hence increased mining dififculty.
The difficulty has maintained an upward trend since increasing for the first time in 2 months on 31 July 2021:
Up 6.03% on 31 July 2021
Up 7.3% on 13th August 2021
Up 12.37% on the 25th August 2021
While the migrating operations were offline since mid May through June and July 2021, miners already operating in countries such as the United States were able to rake in bigger profits due to the lower difficulty.