After weeks of a drop in hash rate, there seems to be light at the end for Bitcoin. This follows a move by Iran to issue licenses to more than 30 mining farms. The licenses are for miners in Semnan, Zanjan, East Azerbaijan, and Mazandaran provinces. The country has also issued over 2500 establishment permits spread across the provinces.
The move by Iran seems to have been received well by the market. Bitcoin has started the week green. At the time of going to press, the crypto was up by 5.5% and back above $34k.
Bitcoin’s hash rate started crashing after China took a tough stance on crypto miners. China sent signals of an impending crackdown when Bitcoin was at $64k. Since then, the market has been bearish. The selloff intensified when the actual crackdown started and pushed the price of BTC to $29k.
The reason why the hash rate is so important is that it has implications for network security. The lower the hash rate, the higher the chances that the network can be compromised. It also lowers the price floor for Bitcoin, increasing the risk of the price correcting even further.
The good news is that the scenario is changing. Besides Iran, several other countries are embracing Bitcoin mining. El Salvador is one of those that have fully embraced BTC mining. One of the biggest miners in China also announced that it was moving its operations to Kazakhstan. It expects its machines to be up and running by mid-July.