Bitcoin Hashrate Drops 15% Due to US Heat Wave

In June, the Bitcoin network experienced a significant decline in its hashrate, dropping by 15%. This decrease was attributed to a summer heat wave in the United States, which put stress on the electricity grid and led to increased electricity prices. The hashrate, which measures the total computational power on the Bitcoin blockchain, started the month at around 942.6 million terahashes per second (TH/s) and ended at 799 million TH/s. This sharp decline was the steepest drop in three years, prompting speculation about the underlying causes. While some suggested that Israel’s attacks on Iran’s infrastructure might be a factor, the connection was deemed weak. The primary reason for the decline was likely the increased demand for cooling due to the heat wave, which led to higher electricity prices and forced some miners to shut down their operations.

Despite the decline in hashrate, businesses continued to add Bitcoin to their balance sheets, following the example set by Strategy executive chairman Michael Saylor. According to industry tracking services, 26 companies added Bitcoin to their treasuries in June, bringing the total number of companies holding Bitcoin to 250. Saylor’s strategy of issuing debt to fund Bitcoin purchases has gained traction, with Strategy’s stock price continuing to grow despite increased issuances. In June, Strategy’s stock price increased by 6%. However, not all observers are convinced of the strategy's long-term viability. A report from venture capital firm Breed posited a seven-step cycle triggered by a hypothetical Bitcoin price crash, culminating in BTC liquidations and market panic.

Regulatory developments in Asia also made headlines in June. Four jurisdictions across Asia implemented crypto-friendly policy changes. In Thailand, the Cabinet approved a proposal to exempt crypto from capital gains tax until the end of 2029. In South Korea, the ruling Democratic Party proposed the Digital Asset Basic Act, which would allow stablecoin issuance and provide refund guarantees. The governor of South Korea’s central bank also expressed support for the issuance of a won-based stablecoin. Malaysia launched a regulatory sandbox called the Digital Asset Innovation Hub, while in Hong Kong, securities regulators are working on a framework for crypto derivatives trading for professional investors.

Crypto adoption at the government level continued to grow, with five major crypto businesses securing licenses in different jurisdictions. Coinbase, Gemini, and Kraken secured licenses in the EU under the Markets in Crypto-Assets (MiCA) regulatory framework, allowing them to serve clients in European markets. Bitget secured a license in Georgia, while MoonPay obtained a BitLicense from New York state regulators. Fintech firm Ant Group and e-commerce giant JD.com are also seeking certifications related to stablecoins, with Ant Group looking for licenses in Hong Kong and Singapore, and JD.com announcing a global certification push.

In the United States, seven states made progress on crypto-related lawmaking. Oregon and Colorado amended state laws to include cryptocurrencies in abandoned property regulations. Texas Governor Gregg Abbott signed a bill establishing a Bitcoin reserve and requiring crypto to be forfeited if related to crimes. Louisiana set up a licensing structure for crypto kiosk providers and established a subcommittee to study blockchain and cryptocurrencies. Connecticut and Rhode Island introduced standards for crypto ATMs and created legislative commissions to study blockchain and cryptocurrencies. Florida, however, did not pass any crypto kiosk rules, with a related bill dying in committee.