The Bitcoin hash rate experienced a significant downturn, falling by 34%, following a sudden temperature drop in Texas. This decline in cryptocurrency mining activity coincided with a demand surge on the state's energy grid, prompting miners to reduce their operations.
On January 14th, many areas in Texas saw temperatures plunge below freezing, a rare occurrence since the massive ice storm of February 2023.
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According to YCharts, the Bitcoin network's hash rate plummeted from over 629 exahashes per second (EH/s) on January 11th to around 415 EH/s by January 15th. The hash rate showed signs of recovery, climbing to over 454 EH/s on January 16th, as Austin's temperatures briefly warmed.
Texas, responsible for about 29% of the Bitcoin hash rate in the United States, has become a key player in the cryptocurrency mining industry. This rise in prominence is largely due to the relocation of several mining firms from China, following the country's crackdown on crypto activities. Notable companies in Texas include Marathon Digital, Riot Platforms, Bitdeer, and Core Scientific.
Unlike the 2021 winter storm that led to widespread power outages and treacherous conditions, the recent cold snap's impact on Texas' power grid was less severe. Many mining firms have enrolled in a program with the Electric Reliability Council of Texas (ERCOT), compensating them for reducing electricity usage during high-demand periods.
Marathon Digital's Charlie Schumacher commented on the situation, stating:
Marathon, along with other Bitcoin miners, have been curtailing operations to support the Texas electric grid and the citizens of the state, who have been battling sub-zero temperatures. This is precisely how the system should be working. Bitcoin miners serve as base load that turns off during extreme weather events, making energy more abundant and cheaper for those who need it within minutes.
Additionally, a Riot spokesperson stated:
Riot actively participates in demand response programs, allowing ERCOT to manage the Company’s load when assistance is crucial for balancing the grid amid challenging weather conditions.
The challenge for Texas' energy infrastructure is not limited to the winter. High demand during the summer also puts strain on the system.
