Why China’s Recent Mining Crackdown Triggered Bitcoin’s Latest Sell-Off
China's renewed crackdown on domestic Bitcoin mining, forcing shutdowns in Xinjiang, caused a significant drop in global hashrate and triggered selling pressure.Summary
Bitcoin's recent price decline is strongly correlated with China's renewed crackdown on domestic mining, particularly in Xinjiang province, where an estimated 400,000 miners were forced offline. This abrupt disruption caused Bitcoin's computing power (hashrate) to fall by about 8% (roughly 100 EH/s) within 24 hours, pushing Bitcoin below $90,000.
Analysts suggest this creates liquidity stress, as forced shutdowns compel miners to sell Bitcoin holdings to cover operating costs or relocation expenses, generating immediate sell pressure on the market. This crackdown occurred just as China had regained its position as the world's third-largest mining hub (accounting for 14% of global hashrate by October), despite the formal 2021 ban, due to access to low-cost power.
The regulatory pressure coincided with Bitcoin's 30% drop from its October peak and low transaction fees, severely squeezing miner revenues and amplifying the market's short-term volatility.
(Source：BeInCrypto)