Bitcoin Hashrate Drops 15% in June Amid Geopolitical and Environmental Pressures

Bitcoin's hashrate experienced a significant decline of approximately 15% between June 15 and June 24, marking the steepest drop in three years. The hashrate plummeted from nearly 943.6 billion terahashes per second (TH/s) to 799.9 TH/s, a level not seen since May. This dramatic fall has sparked speculation about potential geopolitical and environmental factors contributing to the downturn.

One of the primary theories circulating within the cryptocurrency community points to Iran as a potential cause. Iran is known for its extensive Bitcoin mining operations, which have been linked to local power outages. The National Council of Resistance of Iran reported that large-scale cryptocurrency mining operations, often run or protected by state actors, are partly responsible for these outages. However, closer examination reveals that the timing of Iran's internet blackout and the US strike on Iranian nuclear facilities does not fully align with the hashrate decline. The hashrate began to fall before these events, suggesting that other factors may be at play.

Other contributing factors include rising electricity prices and the ongoing heatwave in the US. The heatwave has led to lower mining efficiency, prompting some low-profitability mining facilities to shut down. Additionally, increased power demand during heatwaves drives up electricity prices, further reducing the profitability of Bitcoin mining. New York-based utility Con Edison recently urged customers to conserve energy, leading to higher power prices in some regions.

It is important to note that Bitcoin's network hashrate is not directly measured but is calculated based on block time and current mining difficulty. This calculation provides an average of the computing power required to find a valid block, but real-world mining has significant variations due to chance. Therefore, while the Iran theory cannot be entirely dismissed, market observers suggest that a combination of geopolitical, environmental, and economic pressures are likely influencing the hashrate decline.