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.
0.033/kWh hosting is insanely cheap. no wonder the hashrate recovered so fast when the economics still worked at 6.25 BTC blocks
Tomas Novotny 0.033 is cheap but you also had to ship ASICs to Sichuan, set up in weeks, and pray the rainy season delivered. operational risk was huge
hydro_offset_ everyone forgets the operational nightmare of Sichuan. shipping ASICs across borders in weeks hoping the rainy season delivers. not exactly free money
kraken doing 123M in volume on a sunday tells you everything about 2020 retail. everyone was stuck at home with stimulus checks and nothing to do
joke_bidet_ the stimulus check narrative is real. i watched three friends open coinbase accounts that month using their $1200 checks
Hosting below 0.033/kWh in Sichuan was the cheat code. Miners who relocated first after the halving cleaned up
watching the top 10 pools drop 18 EH/s on halving day was wild. went from 120 to 100 in hours as every marginal miner just pulled the plug
eh_drop_witness 18 EH/s gone in hours is wild but the interesting part is it came back in weeks not months. shows how fast ASICs can relocate when electricity is cheap enough
hydro season at 0.033/kWh in Sichuan was the only reason half those miners came back online. BTC at 9164 with 6.25 rewards needed every cent of cheap power
sichuan_cheap_ the geographic arbitrage worked because China allowed crypto mining back then. the whole playbook collapsed a year later when the ban hit. try this in 2026 and youre fighting over Texas and Paraguay
Niamh O’B. the china ban in 2021 made this whole playbook impossible. 0.033/kWh hydro in sichuan was a once in a lifetime arbitrage that disappeared overnight
Hashrate dropping from 120 to 100 EH/s sounds dramatic but the recovery was faster than anyone predicted
Bjorn H. faster recovery because Sichuan hydro season started right after. timing was lucky. if the halving had been in december the capitulation would have lasted months
the sichuan timing was pure luck. may halving plus june hydro season was the best case scenario for miner recovery
Every halving follows the same pattern. Miners capitulate, hashrate dips, efficient operators survive, price runs up 6 months later
this pattern held in 2016 and 2024 too. miners capitulate, efficient operators absorb hashrate, then price rips 6-12 months later. the playbook writes itself
Sven T. same pattern in 2024. capitulation then slow grind up. the 6 month lag between halving and price discovery is the most consistent chart in crypto
joule_hawk_ the 6 month lag between halving and price discovery is the most reliable pattern in crypto. 2012 2016 2020 2024 all followed it. miners who hold through the dip win every cycle
Emil K. the 6 month lag is real. 2020 halving to 69k peak was textbook. but 2024 halving to ATH in months not years shows the cycle is compressing
miners relocating to sichuan for cheap hydro was the original geographic arbitrage. now everyone fights over texas and paraguay
0.033/kWh hydro is never coming back. texas at 0.05 with curtailment deals is the closest thing in 2026 and it still doesnt compare
Sichuan hydro at 0.033/kWh was basically free money for anyone who moved fast. the geographic arbitrage after each halving is the real miner strategy
120 to 100 EH/s drop sounds bad but BTC barely moved. miners were hedged with cheap hydro contracts. the real capitulation came in 2022 not 2020
Sora H. 120 to 100 EH/s was barely a blip. the real capitulation was 2022 when BTC hit 16K and even hydro operators were underwater. 2020 halving was gentle compared to what came next
Sora H. 120 to 100 EH/s was noise. the miners who survived 2020 were the ones locked into Sichuan hydro at 0.033. the capitulation myth gets oversold every halving cycle