Bitcoin Miners Find Their Footing Two Months After the Halving as Hashrate Recovers

Just two months after Bitcoin’s historic third halving slashed block rewards from 12.5 to 6.25 BTC, the mining industry is showing signs of resilience. On July 20, 2020, Bitcoin trades at $9,164, and the network hashrate is steadily climbing back as miners complete their seasonal migration to Sichuan’s cheap hydroelectric power.

TL;DR

• Bitcoin’s third halving on May 11 cut block rewards to 6.25 BTC, immediately dropping top pool hashrate by 18 EH/s
• The network hashrate fell from ~120 EH/s to ~100 EH/s on halving day as unprofitable miners shut down
• Sichuan Hydro Season beginning in late May provided hosting costs below $0.033/kWh, reigniting mining operations
• BTC price held steady at $9,164 on July 20, down just 0.6% — a sign of post-halving stabilization
• Total Kraken trading volume reached $123.4 million on July 20, near the weekly and 30-day averages

The Halving Aftermath: A Gradual Recovery

When Bitcoin’s block reward was cut in half on May 11, 2020, the immediate impact was stark. The top 10 mining pools saw their combined hashrate plummet by approximately 18 EH/s within hours, dragging the total network hashrate from roughly 120 EH/s down to around 100 EH/s. For the first 24 hours of the new 6.25 BTC epoch, only 137 blocks were mined — well below the target of 144 — indicating that many miners were unprepared for the suddenly reduced revenue.

But the mining industry had weathered worse just months earlier. The March 12 “Black Thursday” crash sent Bitcoin plunging more than 50% to $3,800, wiping out the profitability of most mining operations and slashing hashrate from 124 EH/s to 95 EH/s — a 23% drop. That episode proved to be a dress rehearsal for the halving’s challenges.

The Great Migration to Sichuan

Each year, Chinese mining operations undertake a “Great Migration” — moving equipment from Xinjiang in the northwest to Sichuan province to take advantage of abundant, cheap hydroelectric power during the rainy season. In 2020, this migration began right after the halving, with machines taking one to two weeks to reach their destination.

The economics were compelling. Sichuan hosting costs averaged less than 0.23 RMB per kilowatt-hour (approximately $0.033), dramatically reducing the break-even threshold for miners operating on thin margins post-halving. Some machines had never left Sichuan after the 2019 hydro season, allowing operators to power them on immediately. Others, particularly older-generation ASICs, remained in Xinjiang as their owners waited to see whether post-halving revenue could justify operational costs.

Network Difficulty Adjusts to New Reality

Bitcoin’s self-correcting difficulty mechanism played its usual role in restoring equilibrium. As hashrate dropped, difficulty adjusted downward, making it easier for remaining miners to find blocks and maintain profitability. By mid-July, the network was showing clear signs of recovery — hashrate was climbing as new-generation ASICs came online in Sichuan and difficulty adjustments brought revenue per terahash back toward sustainable levels.

The yield per TH/s sat at approximately $0.065 in July 2020, a figure that would later multiply fivefold as Bitcoin’s price surged in late 2020 and early 2021. But for miners in July, the calculation was razor-thin: electricity costs, equipment depreciation, and the uncertain trajectory of Bitcoin’s price all weighed heavily on operational decisions.

Market Stability on July 20

The broader crypto market showed subdued activity on July 20, with Bitcoin trading at $9,163 on Kraken — down a modest 0.6% for the day. Ethereum held at $236.19, down 1.4%. The day’s total Kraken trading volume of $123.4 million sat just below the weekly average of $127.2 million and the 30-day average of $129.8 million, suggesting a market in consolidation mode.

Not every asset was quiet, though. WAVES surged 9.3% to become the 10th most-traded crypto on Kraken that day, while LINK — which had been on a tear all week — pulled back 11% to $7.24. XTZ dropped 7.4%, ADA fell 5.1%, and ATOM slid 7.6%, painting a picture of a broad altcoin cooldown after the previous week’s enthusiasm.

A Brief Halving-Arbitrage Episode

The halving had also created a brief but instructive arbitrage opportunity. In the hours immediately following the reward reduction, some miners switched their SHA-256 hashrate to mine Bitcoin Cash and Bitcoin SV, where the block rewards had not yet halved (BCH halved on April 8, BSV on April 9, both earlier). This cross-chain mining briefly increased revenue per TH/s before the arbitrage spread leveled out within hours.

The f2pool mining pool marked the halving with a symbolic gesture: the final 12.5 BTC block included a message referencing a New York Times headline — “NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue” — echoing Satoshi Nakamoto’s genesis block message about bank bailouts more than a decade earlier.

Why This Matters

The period around July 2020 represented a critical transition for Bitcoin mining. The halving stress-tested the industry’s resilience, forced out inefficient operators, and set the stage for the massive hashrate growth that would follow in late 2020 and 2021. The speed of recovery — from 100 EH/s post-halving back to pre-halving levels within weeks — demonstrated the robustness of Bitcoin’s difficulty adjustment mechanism and the flexibility of mining operations that could relocate across China for seasonal energy advantages.

For investors, the lesson was clear: Bitcoin’s supply issuance dropped by 50% overnight while demand showed no signs of slowing. The quiet consolidation around $9,100 in July 2020 would prove to be the calm before one of the most dramatic bull runs in crypto history.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency markets are highly volatile. Always conduct your own research before making investment decisions.