With China Out, North America’s Hash Rate Share Set to Hit 50-60%

In the fallout of China’s mining ban, Luxor Mining which provides analysis, data, and hash rate insights has projected that public North American miners will grow their hash rate by 270% in 2022 to control 50-60% of hash power.

The projection is based on publicly-available data from press releases, company presentations, and Securities and Exchange Commission filings, it says in its latest Weekly Hash newsletter. It adds that while some estimates are based on end of year predictions, others are based on Q2 and Q3 predictions and subject to change based on new orders or supply chain disruptions.

Luxor’s forecast follows a recent research by the Cambridge Centre for Alternative Finance which shows through its Bitcoin Electricity Consumption Index (BECI) that the US has overtaken China as the top global destination for Bitcoin mining. 

China has been the world’s top mining market since BECI started compiling its hash rate data in 2019 for its cheap electricity, and being home to the world’s top mining pools and exchanges. China still led the market until June 2021 with its 34.3% contribution to the global hash rate – though down from 65% as at April 2020 – before dropping to 0% between July and August 2021 according to the BECI’s data.

By the end of August 2021, the BECI shows the US now has a global hash rate share of 35.4% (up from 16.8% at the end of April), Kazakhstan with 18.1% (up from 8.2%) and the Russian Federation with 11% (up from 6.8%).  It notes that going by the August data, future hash rate recovery after the May/June drop will likely be further distributed predominantly between the largest share gainers – US, Kazakhstan and the Russian Federation. However, no projection was made about the proportion of distribution.

The Bitcoin mining insights provider has been reporting on the growing strength of American miners in the wake of China’s crypto mining ban including their being able to produce about half of their total output of Bitcoin for Q2 in July alone. They have also been reportedly seeing increased revenue following the reduced competition from China. 

We ran the numbers, and the biggest miners in North America plan to collectively operate some 80 EH/s by the end of next year—more than half of the network’s current total hash rate,” it states. “With this torrent of hash rate forecasted for 2022, we anticipate that North America’s hash rate share will easily grow to 50-60% next year. Moreover, the network’s total hash rate should eclipse 250 EH, propelled both by these companies booting up new machines and by displaced Chinese miners finding new homes for their operations.”

The collective hash rate of ten companies profiled by Luxor Mining for its forecast shows an expected increase of 277% – from 17.83 EH/s to 67.34 EH/s. It adds that the addition of other public or soon-to-be-public miners like Gryphon, Atlas, Mawson, DMG and others could add an extra 14 EH/s to the estimate for a total of 81.34 EH/s.

Meanwhile, while more US states continue to woo miners to their sides in the face of growing energy use, concerns over the environmental impacts of crypto mining have been generating interest as well. For instance, discussions on what the potential impacts of crypto mining could be on New York’s climate goals was back in the state Assembly this week.