At the end of May, local authorities announced plans to restrict bitcoin mining. Such event had many consequences — today we will try to go deeper in this situation.
🔎 On May 18, the authorities of the country banned the provision of services related to cryptocurrency to financial institutions and payment companies. The official reason for the ban was the high volatility of cryptocurrencies and speculative trading using them. And on May 21, the decision to combat mining on behalf of the Committee of the State Council of China was adopted. It is planned to prevent "the spread of individual risks in the social sphere".
While this is not the first case of restrictions related to mining in the region, it has shook the market — more than half of the companies and entrepreneurs engaged in mining are concentrated in China. And even though the country's authorities may intend to fight only miners who use energy from coal-fired power plants, miners are forced to drastically change their strategy.
Vitaly Borschenko, co-founder of BitCluster, noted that if it were only a question of environmental friendliness, the government could offer to transfer mining to its own "clean" energy. But that is not the case. Therefore, miners in regions of China with a lot of "green" electricity are also in a difficult position.
💸 The risk of losing money is stronger and greater than the possible costs of forced "relocation.
BTC.TOR and HashCow announced changes in their work with China, and cryptocurrency exchange Huobi stopped serving clients from mainland of China.
Cryptocurrency exchange rates have changed, as well as individual investor excitement has increased. Our company has noticed an increase in hosting requests from large miners from China. For example, there was a request to host 30,000 3.5 kW devices with a total capacity of more than 100 megawatts.
Despite the circumstances, it is worth believing that this attitude to cryptocurrencies will only lead to a redistribution of mining farms around the world, but, by no means, will not be a reason for major upheavals in this area. Volatility of digital assets and ambiguous attitude from the authorities is normal, and after a short "shake-out" bitcoin will surely strengthen its position in the market.