April 17 2021 crypto selloff
Chinese blackouts result in hash rate drop; Twitter rumors of a potential impending US DoJ filing of a civil action against a number of crypto exchange operators
China is currently experiencing rolling power outages which have been linked to ongoing security reviews of their coal power plants.1 2 These security reviews are occurring on the back of a number of widely publicized accidents and other operational incidents in their coal mines.3
Bitcoin mining is predominantly done in China - this is well established. If you look at the total monthly hashrate between Q3 2019 and right now, 72% of the monthly average hashrate originates from Chinese IP blocks. (These values could potentially be skewed from true values due to use of VPNs but frankly I don’t see why someone would use a VPN if they are performing PoW computations - this is all ), or through various cloud providers.
Separately, there are rumors of a Treasury crackdown on operators of crypto service providers due to money laundering violations. If there was any active criminal cases, I would imagine that this would be executed by the DoJ rather than Treasury. This rumor was started by @FXHedge on Twitter. The original post is linked below.
