In mid-August 2020, massive floods have engulfed China as the nation struggles to maintain crop harvest and fight the COVID-19 pandemic. According to reports, these massive floods have also adversely impacted the growth of Bitcoin in the country. As of August 18, the Bitcoin hash rate in China has dropped between 10% and 20% due to the paralyzed market situation caused by heavy floods.
Trade experts believe that the Southeast Asian crypto market is witnessing a significant fall due to the turbulent conditions of China. Being one of the world’s largest markets for Bitcoin and other cryptocurrencies, the hash rate of Bitcoin in China dropped by nearly 25% in early August. During that week, the Sichuan province of China received heavy rains and caused significant floods. Multiple landslides occurred due to the massive downpour in the Sichuan province. These landslides triggered a Level I emergency response in the country and affected provinces. This response is considered to be the highest in China’s 4-tier emergency response system.
Under this situation, Bitcoin mining in China got linked to the economic instability of the Sichuan province. Last month, Bitcoin in China had successfully crossed the $12,000 evaluation, which is why crypto markets were expected to do well for Chinese miners. In addition to this, the inexpensive electricity costs supported by heavy monsoon’s “hydro” season had spiked the Bitcoin prices, where its hash rate made a record average high at 129 EH/s on Saturday, August 15.
With the floods in Sichuan, Bitcoin miners concentrated in this area compelled the drop in Bitcoin hash rate. It cames as an aftereffect to the floods and plummeted the Bitcoin hash rate to 105 EH/s from 140 EH/s. China’s top mining community—Poolin witnessed a 20% drop in the hash rate to 16EH/s from 20 EH/s. F2Pool and other major Bitcoin mining pools in China experienced a hash rate drop of somewhere between 20–25%.