Bitcoin mining difficulty fell 16% on Sunday to 21 trillion, the sharpest drop this year. The correction suggests that Chinese miners are turning off some machines before further government crackdowns on mining.

Bitcoin mining difficulty measures the amount of computer power needed to produce new Bitcoins. The network adjusts the difficulty (approximately) once every fifteen days to reflect the level of competition between the miners. The lower mining difficulty indicates less competition.

More than 75% of the miners who validate Bitcoin transactions are based in China. Last Friday, the government added Bitcoin mining to a list of industries that required monitoring to protect the economy.

Shortly thereafter, Huobi and OKEx restricted Chinese customers' access to certain services. A spokesman for Huobi told Decrypt that the restrictions were a response to government comments. OKEx told Decrypt that its restrictions are intended to remain in compliance with regulators.

Government sources reportedly told Chinese publication Caixin that the government is concerned that cryptocurrencies may harm investors and that it prefers to use electricity and computer chips elsewhere.

Inner Mongolia has already started to crack down. The region's self-government is considering adding Bitcoin miners to social credit blacklists and has proposed revoking telecommunications licenses for miners.

Today's adjustment also increased the average time needed to produce a block to 11 minutes and 55 seconds – almost four minutes longer than on May 13, when block production averaged 8 minutes and 14 seconds.

In the previous adjustment, on May 13, the mining difficulty reached a record when it rose 21.53% in relation to the levels of difficulty defined on May 1.

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