The first Bitcoin miners are withdrawing from China, the market is recovering
The Chinese government wants to ban crypto mining from its national territory, probably mainly because of the climate effect. The first miners are already reacting. Meanwhile, the big coins are recovering strongly.
Up to 70 percent of all cryptocoins have been mined in China so far. This will change now. Because the Chinese government wants to massively regulate crypto mining.
Large players such as Huobi Mall, which mines cryptocurrencies and operates the Huobi crypto exchange, and the mining pool around BTC.TOP have announced the end of their Chinese activities. In any case, the crypto miner Hashcow will no longer install any new mining rigs, i.e. the hardware required for digital mining, in China. That reports Reuters.
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Miner against China business partially up
The reactions stem from an announcement made by a State Council committee headed by Deputy Prime Minister Liu He. That had targeted the mining of virtual currencies last Friday – because of the resulting financial risks, as it is called.
Basically, this came as no surprise after China’s critical stance towards crypto currencies, which has been known for years. Apparently, due to their sheer market share in crypto mining worldwide, the crypto miners had expected a somewhat gentler treatment.
The Huobi crypto exchange systematically suspended both crypto mining and crypto trading services for new customers from the People’s Republic on Monday. Instead, it will focus on business overseas, the company said.
The operators of the mining pool BTC.TOP also want to suspend business in China for the time being because of the regulatory risks. Hashcow’s miners just don’t want to buy new hardware at first.
Mining is torpedoing China’s climate goals
Some experts see the reason for the Chinese government’s crypto crackdown less in the financial risks for investors than in the energy consumption. After all, Chinese President Xi Jinping promised CO2 neutrality by 2060.
It is said that this cannot be achieved without a strong restriction on crypto mining. After all, it is to be expected that the annual energy consumption of China’s crypto miners will peak at around 297 terawatt hours in 2024.
That would be more than Italy’s total electricity consumption in 2016, according to a study recently published in Nature Communications has been published. China can therefore not leave such a large influencing factor as crypto mining unregulated.
Miners want to bet on Europe and the USA – they are unlikely to be enthusiastic
BTC.TOP founder Jiang Zhuoer takes the new developments relatively calmly. In case of doubt, after losing its status as a global trading center for cryptocurrencies in 2017, China would also lose the role of the global mining center in 2021. In the future, mining would take place in the USA or in Europe, where BTC.TOP now wants to build up appropriate capacities.
However, this view could soon prove to be too optimistic. After all, the USA and Europe are not necessarily good at talking about cryptocurrencies either. In particular, if it were to endanger its own climate goals, a rapid political reaction can be expected.
In the meantime, there are increasing signs in the USA that there will be increased regulation. Jerome Powell, chairman of the US Federal Reserve, also showed clear skepticism about cryptocurrencies last Thursday. In his opinion, they pose risks to financial stability and must be strictly regulated accordingly.
The US Treasury Department also announced on May 20, 2021 that it was considering a legal notification requirement for crypto transactions of more than US $ 10,000. This is intended to support tax compliance, which many governments around the world see in danger because of the supposed anonymity of the transactions.
Bitcoin and other digital currencies are facing an increasing number of restrictions around the world. The volatile currencies do not take this lightly.
Cryptocurrencies with drastic fluctuations
Bitcoin and others had fallen massively recently. The crypto market had almost halved within a few days. Investors have suffered a loss in value of over a trillion dollars.
On Whit Monday, there were some clear upward movements across all coins. Bitcoin rose by around 12 percent in 24 hours, and ether by as much as 25 percent. The Binance Coin is also making a considerable spurt with an increase of around 32 percent. Cardano, the bearer of hope, achieved a significant 26 percent plus with his ADA coin That may be a reason for a certain optimism. However, we were recently able to see that the rumored volatility of 30 percent can quickly reach 50 percent.
