The entire crypto market is down more than 10% in the last two days as China is cracking down on large-scale bitcoin miners. This is no longer FUD as we have observed the hash rate drop to an eight-month low. On 14th May, it was 180.66M, and it now stands at 127.65M. Even the entire machinery is being shipped with the help of a logistic firm in Guangzhou.
As reported by a Chinese news portal: Globaltimes– This move by the government of China is estimated to wipe out 90% of bitcoin mining, at least for the short term, as regulators and traditional banking officials are holding their ground by not allowing any crypto activities or services.
They have also made it clear to not provide any source of electricity for the miners to run their machines. Due to such immediate actions, a majority of miners suffered huge losses and they are also unable to find the right location to move their devices overseas.
The exit window is closing, and we’re scrambling to find overseas mines to place our mining devices- A Sichuan-based Industry Inside.
China cracking down on bitcoin mining is no surprise, as they want nothing to do with cryptocurrencies and want to focus on their carbon footprint and five-year economic plan. However, the government narrowing down on Sichuan was shocking because- miners were going to take advantage of the rainy season and use only hydropower as a source of electricity.
Some miners also feel- the cost of machinery will go down significantly in the short term, and they must find an immediate alternate location. Right now, a China-based logistics firm is airlifting 3,000 kg bitcoin mining machines to Maryland, USA. The price per kilo is as low as $9.37, and CNBC confirms that both parties have cleared taxes.
We have also found out that several banks in China gave strict warnings to companies to not allow or engage in any type of trading and block transactions. The banks also sent out a similar notice for their users and merchants, reminding them of the risk they could carry if they would invest in cryptocurrencies.
China clearly has no interest in taking part in this crypto revolution, at least for the time being, so we can expect bitcoin to be oversold in the next couple of days or weeks. It would also be interesting to watch how the mining activities would expand in the US and how will it impact the big picture for bitcoin and other cryptocurrencies.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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