Bitcoin Mining Under Pressure: Hashrate Flattens as Price Crash and PBOC Crackdown Shake the Network

The Hardware/Software Landscape

On November 22, 2019, the Bitcoin mining industry finds itself at a crossroads. The network hashrate, which had been climbing steadily through much of 2019, has flattened at approximately 92 exahashes per second (EH/s), reflecting the strain placed on miners by a dramatic decline in Bitcoin’s price. The flagship cryptocurrency has tumbled to around $7,296, down more than 35 percent from its mid-year highs near $14,000, and the pain is rippling through the entire mining ecosystem.

The mining hardware landscape in late 2019 is dominated by Bitmain’s Antminer S17 series and MicroBT’s Whatsminer M20S, both delivering roughly 50-60 terahashes per second (TH/s) at wall-power consumption around 2,500-3,000 watts. These next-generation machines replaced the older S9 generation throughout 2019, driving a significant expansion of network hashrate earlier in the year. However, with Bitcoin’s price now roughly half of what it was in June, many of these machines are operating at or near the breakeven point, particularly miners paying commercial electricity rates above $0.06 per kilowatt-hour.

The timing of the latest market turbulence compounds an already challenging environment. The People’s Bank of China’s Shanghai headquarters announced on November 22 that it would crack down on cryptocurrency trading activities, sending shockwaves through the market. The PBOC statement, which vowed to dispose of virtual currency business activities, triggered an immediate sell-off that pushed Bitcoin below $7,300. For miners already operating on thin margins, the sudden price drop threatens to push unprofitable operations underwater.

Hashrate and Difficulty

The Bitcoin network’s mining difficulty has already begun reflecting the pressure on miners. In November 2019, the network experienced a 7 percent difficulty drop, one of the more significant downward adjustments of the year. This adjustment came as the hashrate flattened after Bitcoin’s price decline erased more than a third of its value from the June peak near $14,000.

Difficulty adjustments are a fundamental feature of Bitcoin’s self-regulating design. Every 2,016 blocks (approximately two weeks), the network recalibrates how hard it is to find a valid block hash. When miners go offline because mining becomes unprofitable, the hashrate drops, blocks take longer to find, and the next adjustment makes mining easier. Conversely, when new miners come online, difficulty increases. The 7 percent drop in November signals that a meaningful number of mining operations have either shut down or scaled back their operations.

For context, the Bitcoin network’s hashrate grew from roughly 40 EH/s at the start of 2019 to a peak near 110 EH/s in September before beginning its retreat. The current level around 92 EH/s still represents more than double the hashrate from January, but the downward trend is unmistakable. Mining pools including F2Pool, Poolin, and BTC.com continue to dominate the distribution of hashpower, with Chinese pools controlling an estimated 65 percent of the global hashrate — a concentration that makes the PBOC’s crackdown particularly relevant to network health.

Profitability Metrics

Mining profitability in November 2019 presents a starkly different picture than the boom months of the spring and summer. At Bitcoin’s current price of $7,296, the daily revenue per terahash has declined to levels that challenge all but the most efficient operations. With the block reward at 12.5 BTC and transaction fees averaging roughly 0.5 BTC per block, miners are competing for approximately $1.3 million in daily revenue spread across the entire network.

For an Antminer S17 Pro running at 53 TH/s with power consumption of 2,094 watts, the estimated daily revenue stands at roughly $3.50 per day before electricity costs. At $0.05 per kWh — the rate available to large-scale operations in regions like Sichuan, Inner Mongolia, or parts of Washington state — daily electricity costs run approximately $2.50, leaving a margin of about $1.00 per machine per day. This razor-thin margin leaves almost no room for operational overhead, cooling costs, or facility expenses.

Older hardware, particularly the widely deployed Antminer S9 series (13.5 TH/s at 1,300 watts), has largely become unprofitable at current prices for miners paying commercial electricity rates. Many S9 units have been unplugged or redeployed in regions with exceptionally cheap electricity, contributing to the hashrate decline. The transition from S9 to S17-class hardware throughout 2019 masked some of the revenue compression, but the efficiency gains are now fully priced in and the entire industry feels the squeeze.

Environmental Impact

The flattening hashrate has an interesting side effect on Bitcoin’s energy consumption profile. Estimates from the Cambridge Bitcoin Electricity Consumption Index in late 2019 place Bitcoin’s annualized electricity consumption at roughly 60-70 terawatt-hours, a significant figure but one that has stabilized alongside the hashrate plateau. The University of Cambridge’s research indicates that Bitcoin mining consumes more electricity than some small countries, though the figure remains a fraction of global industrial energy use.

The geographic distribution of mining continues to evolve in ways that affect the environmental calculus. The seasonal migration of mining operations within China — from Xinjiang’s coal-powered regions during the dry season to Sichuan’s hydroelectric surplus during the rainy season — creates significant variation in the carbon intensity of Bitcoin mining throughout the year. In November, many operations are transitioning from Sichuan back to Xinjiang, where coal-generated electricity dominates, temporarily increasing the network’s carbon footprint.

Some mining operations have begun exploring renewable energy sources as a way to reduce both costs and environmental impact. Projects in Iceland, Quebec, and parts of Scandinavia leverage geothermal and hydroelectric power to run mining facilities with minimal carbon emissions. However, these regions account for a relatively small share of the global hashrate, and the bulk of Bitcoin mining in late 2019 remains powered by fossil fuels, primarily in China.

Strategic Outlook

The convergence of Bitcoin’s price decline, the PBOC’s crackdown announcement, and the network’s difficulty adjustment creates a complex strategic landscape for miners heading into the final weeks of 2019. The difficulty drop provides some relief, making it marginally easier for remaining miners to compete for blocks. However, the regulatory uncertainty introduced by China’s latest pronouncement adds a layer of risk that goes beyond simple price economics.

The release of Bitcoin Core 0.19.0 on November 22, developed by over 100 contributors with more than 550 merged pull requests, represents the ongoing technical maturation of the Bitcoin network. While not directly related to mining operations, the software upgrade includes improvements to the peer-to-peer layer and transaction relay mechanisms that contribute to overall network robustness — a factor that long-term mining operations consider when making capital allocation decisions.

For mining operations with access to cheap electricity and efficient hardware, the current environment may present an accumulation opportunity. History suggests that periods of compressed mining margins often precede significant price recoveries, as was the case in late 2018 when Bitcoin bottomed near $3,200 before beginning the rally that would eventually carry it back above $10,000. The miners who survive the current downturn will be well-positioned to capture outsized profits when the cycle turns.

However, survival requires discipline. The next difficulty adjustment, expected in early December, will reveal whether the hashrate decline has stabilized or continues to accelerate. If the PBOC’s crackdown leads to actual enforcement actions against mining operations in China, the network could see further hashrate declines and additional difficulty drops, creating a cascading effect that reshapes the global mining landscape. For now, the prudent approach is to conserve capital, optimize operations, and wait for clarity on both the regulatory and price fronts.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Mining profitability calculations are estimates based on market conditions as of November 22, 2019, and actual results may vary significantly based on individual operational factors.