Miners' response to Chinese regulations from the data｜Listed mining companies Q2 report: Bitcoin production halved, Q3 to complete the migration of mining machines

New York-listed Bitcoin mining company Bit Digital has released its second-quarter operational update. As the company is also involved in mining operations in China, the report may provide insights into how miners are adapting to the increased regulatory scrutiny of Bitcoin mining in China.

Production Halved in Q2

Bit Digital, Nasdaq stock symbol: BTBT, based in New York, reported an unaudited Bitcoin production of 562 coins in Q2, as per its operational report, compared to 1,013 coins in Q1, marking a nearly halved production.

Q2 Operational Updates

Key figures as of 6/30 are summarized as follows:

• 3,515 new mining machines purchased in Q2, with additional deployment expected in Q3
• 562.9 Bitcoins mined in Q2, with reduced output due to machine migration
• 70.8% of mining machines' hash power are in the process of migration, pending installation, or already deployed
• Mining machine sales revenue amounted to $5.4 million, earmarked for purchasing usable mining machines
• Owns 32,500 mining machines, with a maximum total hash rate of 1.92 EH/s, a decrease of 0.34 EH/s from Q1

Bitcoin Asset Balance

In Bit Digital's balance sheet, the number of Bitcoins held increased to 588.4 coins, valued at $2,060 as of 6/30, accounting for approximately 0.003% of all listed companies.

Moving Mining Operations out of China

In response to China's crackdown on Bitcoin mining activities, Bit Digital suspended operations within China from 6/21, claiming to expedite its planned migration to North America since 2020. In Q2, 14,500 mining machines have been shipped, with all machine migration expected to be completed in Q3.

Bit Digital emphasized securing 60 megawatts of hosting power capacity in North America, sufficient to accommodate the remaining machines exiting China. They are also in discussions with existing and new hosting partners to ensure additional hosting capacity.

On China's Regulatory Crackdown: Largest Hash Rate Disruption in History

Bit Digital CEO Bryan Bullett discussed China, describing its regulatory crackdown on mining as a "historic hash rate disruption."

This move by the Communist Party led to a large influx of mining machines into the Chinese spot market, with Bit Digital claiming a strategic bulk purchase. With ample logistical support and technical expertise, they anticipate full deployment in Q3.

Prior to this, the Bitcoin Mining Council (BMC) noted that global Bitcoin mining achieved a 56% renewable energy mix in Q2, prompting skepticism from The Block's Research Director, Larry Cermak.

He pointed out that most hash power went offline due to Chinese regulations, resulting in a small data sample, and miner migration could take several months. This argument aligns with Bit Digital's claim of a similar migration timeline, indicating a potential hash rate return to early-year levels by the end of Q3.