Here's a summary of the key points:
Forced Shutdowns: In regions like Xinjiang, an estimated 400,000 mining machines were abruptly forced offline 🔌. This immediate disruption meant that a large number of miners lost their revenue stream instantly 💸.
Selling Pressure: To cover ongoing expenses, like operating costs, or to finance the effort of relocating their operations outside of China 🌍, some miners were forced to sell their existing Bitcoin holdings 💰. This sudden selling added significant downward pressure to the market.
Loss of Computing Power (Hashrate): The crackdown caused a massive, immediate drop in the global Bitcoin network's computing power (hashrate) 💻. One estimate suggested an 8% drop, or about 100 exahashes per second (EH/s), in a single day.
Market Uncertainty: The sharp reduction in hashrate, which is vital for the security and operation of the Bitcoin network, created uncertainty and stress 😟 in the market. The timing of the price slide to $86,000 coinciding with the news was seen by many analysts as more than a coincidence 🤔
Caught Off Guard: The crackdown was particularly disruptive because, despite a formal ban in 2021, China had recently managed to regain its position as the world's third-largest mining hub, accounting for about 14% of the global hashrate, largely due to access to low-cost power⚡. This week's tightening of regulations therefore caught a re-established sector by surprise, compounding the stress from Bitcoin's recent price drop and low transaction fees.
In short, the Chinese crackdown created an immediate need for liquidity among affected miners, leading to forced sales of Bitcoin that, in turn, triggered and amplified the recent market sell-off 🚨