Is the latest "crackdown" campaign on crypto mining by China just FUD?

In the context of a “risk-off” market (avoiding risks), even a small shock can create a strong wave of FUD (fear, uncertainty and doubt).

The cryptocurrency market has seen this pattern repeat many times. For example, Donald Trump's announcement of tax imposition last October triggered a massive wave of liquidations amounting to 19 billion USD, marking a significant turning point for the rest of Q4.

Currently, a similar scenario seems to be gradually forming. Reports about China tightening Bitcoin mining activities (BTC) have sparked new concern in the market. This story has garnered more attention as BTC's hashrate has decreased by about 8%, further reinforcing investors' fear, uncertainty and doubt.

Source: XTHowever, many opinions suggest that this is just a baseless “inference.”

Specifically, the story began to spread after Jack Jianping Kong posted on social media X that BTC mining activities in Xinjiang are under strict surveillance. Two days later, he continued to state that at least 400,000 mining machines have been shut down in China.

This information was quickly cited as evidence of a large-scale shutdown. However, with Bitcoin's hashrate decreasing by 8%, the question arises: Is this just a coincidence, or does it really signal a major event that could significantly impact the market?

Analyzing Bitcoin mining pools: Separating rumor from reality

The hashrate of Bitcoin has decreased significantly, but the overall picture is much more complex.

The question arises as to whether this decline primarily originates from Xinjiang, reflecting China's tightening of Bitcoin mining activities. To clarify, data from large mining pools shows:

Notably, most of the sharp decline came from North American pools like Foundry USA, with a total decrease of up to 200 EH/s. Meanwhile, pools located in China such as Antpool and F2Pool only saw a total reduction of about 100 EH/s.

Source: Miningpoolstats.streamThus, it can be seen that the information about China shutting down Bitcoin mining activities has been exaggerated.

In fact, by December 18, most pools had recovered to near normal levels, indicating that the drop was only temporary. At the same time, some miners may have proactively suspended operations to avoid being checked.

In summary, the data shows that this is just a short-term interruption, not a large-scale shutdown of Bitcoin mining activities. This incident once again highlights the importance of thorough data analysis before chasing after crowd psychology effects and FUD in the market.

Mr. Teacher