Bitcoin Hash Rate Plunges Ahead of Anticipated Halving Event – Here’s the Latest

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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January 18, 2024 07:52 EST

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The Bitcoin (BTC) hash rate experienced a significant drop of 34% as a result of a sudden freeze in Texas, causing some miners to scale back their operations due to the strain on the state’s energy grid.

The development comes at a crucial time, with the anticipated halving event, where the number of generated BTC rewards per block is reduced by 50%, drawing closer.

Texas Freezes Over, Bitcoin Miners Shut Down

Starting on January 14, temperatures in various parts of Texas plummeted below freezing, marking one of the first severe cold spells since a massive ice storm in February 2023.

Data from YCharts revealed that the total Bitcoin network hash rate declined from over 629 exahashes per second (EH/s) on January 11 to approximately 415 EH/s on January 15, representing a 34% decrease.

A Bitcoin miner in Texas switched off machines to support the grid during extreme cold weather.

Bitcoin mining is the only industry that can respond immediately in times of emergency, while being a "buyer of last resort" to improve viability of energy projects. pic.twitter.com/mJQMc0Isfm

— Bitcoin Archive (@BTC_Archive) January 18, 2024

However, the hash rate experienced a slight recovery, reaching over 454 EH/s on January 16 when temperatures in Austin briefly rose above freezing during the day.

In 2021 Texas faced record-low temperatures and a sudden winter storm resulting in numerous power outages and hazardous road conditions. This resulted in a state-wide power crisis. However, there were fewer reports of significant disruptions to the state’s power grid this January.

Texas has emerged as a significant hub for Bitcoin mining, accounting for approximately 29% of the Bitcoin hash rate in the United States.

Many mining companies relocated to the state from China following the Chinese government’s crackdown on BTC miners and cryptocurrencies.

Leading firms such as Marathon Digital, Riot Platforms, Bitdeer, and Core Scientific have established operations in Texas.

Mining Companies Help Adjust Load on State Grid

Many mining firms have proactively joined a program organized by the Electric Reliability Council of Texas (ERCOT), which compensates them for adjusting their load on the state’s power grid during periods of high demand.

Charlie Schumacher, Vice President of Corporate Communications at Marathon Digital, said:

“Marathon, along with other Bitcoin miners, have been curtailing operations to support the Texas electric grid and the citizens of the state, who have been battling sub-zero temperatures. This is precisely how the system should be working. Bitcoin miners serve as base load that turns off during extreme weather events, making energy more abundant and cheaper for those who need it within minutes.”

Similarly, Riot has affirmed its active participation in demand response programs, allowing ERCOT to manage its load during crucial periods of grid balancing amid challenging weather conditions.

Texas faces a high demand for energy during both extreme heat in the summer and severe winter conditions. This demand can potentially strain the state’s energy infrastructure.

In December 2022, Argo Blockchain reported a significant decrease in mining activity at its Texas Helios facility due to winter conditions, resulting in a roughly 25% reduction in Bitcoin mining compared to November.

As of January 17, ERCOT reported that grid conditions were expected to return to normal starting at midnight local time.

In December last year, the hashrate of the Bitcoin network reached a new all-time high, putting additional pressure on miners who are already grappling with a slump in profitability.

At the time, Bitcoin’s hashrate soared to a record-breaking 544 exahashes per second (EH/s) on Christmas Day.

Throughout the year, network hash rates have more than doubled, witnessing a remarkable 130% increase since January.