In a risk-off market, even a small shock can trigger massive FUD.
The crypto market has seen this pattern repeatedly. For instance, Donald Trump’s tariff announcement in October triggered a staggering $19 billion liquidation cascade, marking a key turning point for the rest of Q4.
A similar setup seems to be emerging now. Reports of a renewed Bitcoin [BTC] mining crackdown in China sparked fresh FUD. The narrative gained traction after BTC’s hashrate dropped around 8%, reinforcing market fears.
However, many are brushing this off as simple “speculation.”
For context, the narrative picked up steam after Jack Jianping Kong, posted on X that BTC mining in Xinjiang was facing scrutiny. Two days later, he claimed that at least 400k miners had been shut down in China.
Consequently, the post was cited as proof of a large-scale shutdown. That said, with Bitcoin’s hashrate dropping 8%, it’s worth asking: Was this just a coincidence, or could it signal the start of another market-moving event?
Bitcoin’s hashrate dipped sharply, but the story is more complicated.
The question is whether the drop came solely from Xinjiang, signaling China’s Bitcoin mining crackdown. To help answer this, the chart below highlights BTC’s hashrate as reported by different mining pools.
Notably, most of the biggest drops came from North American pools like Foundry USA which lost 200 EH/s combined. Meanwhile, China-based pools like Antpool and F2Pool were down about 100 EH/s combined.
Simply put, China’s Bitcoin shutdown looks overblown.
In fact, by the 18th of December, most pools had bounced back near normal levels, showing the dip was temporary. At the same time, some miners probably powered down briefly to avoid inspections.
All in all, the data points to a short-lived disruption rather than a major Bitcoin mining shutdown. This highlights another FUD moment and a reminder that digging into the data is crucial before following the “hype”.
