How Crypto Mining Contributed to the Bitcoin Crash
Many of the largest cryptocurrency blockchains, including those of Bitcoin (BTC-USD) and Ethereum (ETH-USD), operate using a ‘proof-of-work’ system to validate transactions. Proof-of-work blockchains rely on miners: decentralized participants who volunteer processing power to complete cryptographic puzzles – When a miner successfully completes a puzzle, it verifies a set of recent transactions adding them to the existing ledger on the blockchain. The recent success of Bitcoin has caused consumer mentions of mining cryptocurrency to surge to new heights, up +528% YoY on a 30-day moving average... But, these mentions aren't all related to BTC's success.
There are ~1 million Bitcoin miners in the world, and until recently, a great many were located within Greater China.
The CCP’s action against Bitcoin miners has served as a major bearish headwind for the crypto markets at large -- Furthermore, Tesla (TSLA) CEO Elon Musk tweeted negatively about the large amount of energy required for proof-of-work, driving BTC's price lower still.