US Miners Struggle Amid Snowstorm, Bitcoin Hashrate Plunges Over 30%
The winter snowstorm sweeping across the US during Christmas 2022 has had a severe impact on Bitcoin mining operations, forcing many to shut down.
According to CNN, thousands of homes and businesses across the US experienced power outages over the weekend due to an Arctic blast and an extended winter storm, which damaged power lines and plunged temperatures to dangerously low levels, resulting in at least 22 fatalities.
Hundreds of thousands of Americans are waking up in the dark on Christmas Eve, after destructive winds and heavy snow from a winter storm tore down power lines. https://t.co/ScXJkiop4r
— CNN (@CNN) December 24, 2022
This event has inadvertently caused a major upheaval in the Bitcoin network, with the hashrate—a measure of computational power used to process transactions—falling significantly. Since December 24, 2022, Bitcoin's hashrate dropped over 30%, from 230 EH/s to 155 EH/s before recovering to 247.87 EH/s. This decline occurred as many large mining operations paused their activities due to the power issues.
Bitcoin Hashrate Statistics as of December 26, 2022. Source: Ycharts
Riot Blockchain announced it would close its Rockdale facility in Texas due to severe weather conditions. Additionally, Core Scientific—the largest player in the industry that recently filed for bankruptcy—stated that it would implement several energy cutbacks to help stabilize the power grid, acknowledging that Bitcoin production would be reduced during this period.
Due to extreme cold weather sweeping across the eastern and southern half of the US, we will be participating in multiple power curtailments to help stabilize the electrical grid. BTC production is expected to decrease during this time.
— Core Scientific (@Core_Scientific) December 23, 2022
Wrap up and keep warm everyone. 🥶 pic.twitter.com/WGRgXp5tDB
Overall, the severe weather has compounded existing challenges for Bitcoin miners in the US, who are already facing potential bankruptcy due to financial strains.
Miners depend heavily on reliable electricity to conduct their operations, and any prolonged power outages severely impact their ability to mine, which is crucial for covering debts and staying operational.
On the other hand, the US currently accounts for the largest share of Bitcoin's global hashrate at nearly 37%, making the current gridlock in US mining operations a significant concern for the broader market and investors.
