China shuts down the miners: Bitcoin plummets below $90,000

Bitcoin's recent downtrend seems to have found a concrete explanation: a new and sudden wave of restrictions against domestic mining in China.

The epicentre of the crisis is the province of Xinjiang, where an estimated 400,000 miners have been forced to shut down their machines and cease all activity.

The sudden collapse of the hashrate

The technical impact of this move has been devastating. According to Jack Kong, former president of Canaan, Bitcoin's global computing power (hashrate) fell by about 100 exahash per second (EH/s) in the space of just 24 hours.

This drop, amounting to about 8 per cent of the network's total power, just preceded the price collapse, which slipped to $86,000 on Tuesday, breaking through the psychological support of $90,000.

Analysts, including the well-known expert NoLimit, evidenced a direct correlation between the shutdown of machines and the drop in prices. When miners are forced offline, a chain reaction is triggered: the immediate loss of revenue creates an urgent need for liquidity.

Bitcoin's hash rate shows the steepest decline since halving in 2024. The former president of Canaan ($CAN) has stated on X that 400,000 BTC mining machines have been shut down in China

To cover fixed operating costs or to finance the relocation of equipment to other regions, many operators have been forced to liquidate their Bitcoin reserves, increasing the selling pressure on the global market.

An abruptly interrupted renaissance

This crackdown comes at a paradoxical time. Despite the formal ban imposed in 2021, the mining sector in China had managed to reorganise itself clandestinely, exploiting cheap electricity.

Just last October, data from the Hashrate Index indicated that China had once again become the world's third largest mining hub, contributing around 14% to the global hashrate.

In addition to regulatory pressure, miners have to contend with an unfavourable economic environment. The value of Bitcoin is down 30% from its October peak and transaction fees remain at historic lows, drastically reducing profit margins.

Because mining is critical to the security and functioning of the entire network, this structural instability could continue to weigh on the value of the asset in the short to medium term, as the industry tries to adapt to yet another Beijing turnaround.