Bitcoin Mining News that Defined July 2021: From China to German and back to BTC/USD breaking $40k
“Never a dull moment with this one.”
That is a fitting description of Bitcoin news.
In the frantic world of crypto mining and trading, one hour can feel like a month.
There is a fair share of upheaval, exciting developments, and even downright depressing trends. Still, this scene is box-office because it feels like an essential era in the history of money is unfolding before our eyes.
Bitcoin mining has had a busier month than most. A combination of regulatory and price trends shaped miner activity last month. Here are some of the top headlines and events that occurred in July:
The Effects of China’s Crackdown on Bitcoin Mining Hash Rate
This was the elephant in the room.
China’s government began enforcing orders to shut down Bitcoin mining in June, and the effects became apparent in July. The decision to ban mining came under the pretext of concerns about Bitcoin’s carbon footprint. However, the restrictions are sweeping, targeting even miners who use renewable energy.
Accordingly, miners in prolific mining regions like Sichuan and Inner Mongolia closed shop. This resulted in a 90 percent reduction in China’s crypto mining activity. The most significant power shift in the geographical control of Bitcoin mining is taking place in real-time.
By early July, about 54 percent of the Bitcoin network hash rate had dropped off relative to May numbers. This decline shows just how massive a demographic Chinese miners were. CNBC also reported that the mining difficulty had gone down by 28 percent.
The tragedy for Chinese miners was good news for Bitcoin miners elsewhere. The mining landscape got significantly less competitive causing the network to reduce mining difficulty, making the mining of valuable BTC less resource intensive.
With the same resources, less competition means you can mine more. It will take a while for the hash rate to catch up to May levels. Nonetheless, the first weeks of August should see an uptick, however slight.
The U.S. Becoming the New Bitcoin Mining Hub
China’s loss is America’s gain.
Even before China’s crackdown, U.S. institutions were already investing significantly in Bitcoin. There was a 151 percent increase in mining activity from September 2020 to April 2021.
This upsurge in mining infrastructure came from new miners, expanding miners, and those relocating to the U.S.
It will be fascinating to look at the numbers after the exodus of miners from China is factored in. China was the heart of global mining, accounting for half of all activity and as much as 75 percent around 2019.
Core Scientific, one of the largest miners in the U.S., announced plans to list on NASDAQ in a deal worth $4 Billion.
The company will receive over $300 million to improve operations and purchase equipment. Such is the magnitude of the mining boom in the U.S.
19-Year-Old Mining Bitcoin as Full-Time Job
Well, this isn’t the most impressive Bitcoin story by any stretch.
That said, it was notable for its inspiring nature. The feature story of 19 Year Old Nick Sears is impressive.
At his age, most people are settling into college life or just trying to figure life out. This young man already seems to have found his calling.
At only 17, he helped build a Bitcoin mining farm in Dallesport, Washington. He decided to forego the eccentricities of a college dorm or the comfort of home to live next to a data center that houses 4,500 whirling ASIC rigs.
He described his role from setting up racks, creating network infrastructure, and wiring everything. Mining is not a job for those who want glamour and niceties.
However, the rewards speak for themselves.
Just for the skill of knowing how to maintain the machines, he makes more than most of his age mates. His projected $54,000 a year is only a start and will get higher as he gets more experience in the mining sector and gets higher in the seniority ladder.
Such is the power of mining to transform lives. Sears states that he will likely skip college because his self-taught engineering and computer skills are the only things he requires in this field.
MicroStrategy CEO Compares Purchasing Bitcoin to Early Investing In Bitcoin
He is not the most tech billionaire, but Michael Saylor is someone every Bitcoin enthusiast should know.
Saylor was a large factor behind institutions deciding to invest in Bitcoin.
MicroStrategy decided to go big on Bitcoin, spending close to $450 million before adding more coin to their portfolio.
In an interview, he even defended debt-financed Bitcoin buys.
Saylor is a big believer claiming that Bitcoin has elevated his business by a factor of 100. Statistics don’t lie.
This statement is notable because there has been some regression in Bitcoin prices over the past three months. However, when you put it in perspective, Bitcoin is still almost double its highest price before 2020.
For the record, you probably shouldn’t use debt to purchase Bitcoin. This is a corporate CEO with easy credit access and more flexible repayment schedules.
Bitcoin is notoriously volatile and may not recoup your investment when the loans become due. VBit advises that you should be prudent in your Bitcoin mining decisions to avoid messy situations.
Regardless, his comparison of crypto to the early Facebook days is significant. Few could predict that Facebook could become the colossus it is today fifteen years ago. Bitcoin’s ceiling may still be really high.
A New Law Allows One of Germany’s Special Funds to Consider Bitcoin Investments
Speaking of institutions, German Spezialfonds (special funds) will soon be able to invest up to 20 percent of holdings in Bitcoin.
Dekabank, a fund that manages $403 billion in assets, will not pass on this opportunity. Through a spokesman, the firm confirmed to Bloomberg that it would begin evaluating this industry now that it is possible to invest.
Germany’s special funds mainly invest on behalf of pension companies as insurers. Generally, they have a conservative approach. This decision to consider Bitcoin investments is monumental.
It is a tribute to the reputational turnaround that cryptocurrencies have experienced in the past year.
Investments in Bitcoin mining from institutions could have implications for mining difficulty and hash rate.
They will likely start with small investments in an experimental format. Once the floodgates open, the implications on Bitcoin prices could be massive.
Bitcoin Prices Recover Somewhat In Late July
Prices peaked at $60k in April before stuttering in the past three months.
Some of the reasons included China’s crackdown on Bitcoin and the uncertainty caused by Tesla’s decision to stop taking Bitcoin payments.
True to form, Bitcoin is showing its resilience again. In July, prices dipped below $30k before starting a mini-rally back to $40k.
Prices broke a bearish trend and closed the month strong. This recovery was a sigh of relief for many Bitcoin traders who had seen weeks of stagnation.
They are optimistic of further rallies in August that will make mining even more rewarding.
Mine with VBit Mining
To keep up with the latest news in Bitcoin mining, VBit Mining has you covered. This industry is dynamic and constantly undergoing changes.
The clamor for more energy-efficient miners has seen a rapid rise of green miners.
VBit Mining is proud of its pioneer status in this regard. We have been using renewable energy since we started in 2018, and others are now playing catch up.
Visit the VBit Mining shop to learn more about Bitcoin!