The number one destination for Bitcoin miners is America
The United States is now the number one destination for Bitcoin miners, overtaking China for the first time. And while it was heading in this direction, new data Issued by the University of Cambridge makes it official.
As of July, 35.4 percent of Bitcoin’s hash — an industry term used to describe the collective computing power of miners — is in the United States, according to the Cambridge Center for Alternative Finance. This represents an increase of 428 percent from September 2020.
Twelve months ago, China was the market leader in terms of the hash rate by a large margin. But Beijing’s crackdown on cryptocurrencies in the spring brought half of the world’s cryptocurrency out of business overnight.
And miners began fleeing China en masse, heading for the cheapest energy sources on the planet in what has been called the Great Mining Migration. A large number of them ended up in America.
The newly released Cambridge data excludes China’s average monthly share of the global retail rate in July, a significant reversal from September 2020, when China captured about 67 percent of the market.
The United States offers many temptations to immigrant miners who are looking for a new home. For example, states like Texas boast some of the lowest energy prices in the world, which is a huge incentive for miners to compete in a low-margin industry.
The United States is also full of renewable energy sources. Washington state is home to hydro-powered mining farms. New York produces more hydroelectric power than any other state east of the Rocky Mountains.
Meanwhile, Texas’ share of renewables is increasing over time, with 20 percent of its energy coming from wind as of 2019. The Texas grid also continues to rapidly add more wind and solar power.
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America dominates the bitcoin mining industry
Besides lower electricity costs, some US states like Texas also have crypto-friendly policymakers and an adequate supply of hosting infrastructure.
The state has an unregulated power grid with instant, real-time pricing that allows customers to choose between power providers. More importantly, its political leaders are pro-cryptocurrencies.
And when Bitcoin crashed in late 2017, there was little demand for large Bitcoin farms.
Mining operators in the United States seized the opportunity to use the funds to build the mining ecosystem in the United States.
In the last eighteen months, there has been a significant growth in the mining infrastructure in America. There is a huge increase in mining operations looking to relocate to North America, mostly in the United States.
Companies such as North American miner Core Scientific have continued to build hosting space to ensure the ability to deliver new equipment.
The majority of new equipment manufactured from May 2020 through December 2020 was shipped to the United States and Canada.
The mature capital markets and financial instruments around the mining industry have also played a large role in the rapid rise of the industry in the United States.
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