The crackdown, which began in late May, immediately led to a 30% drop in the price of bitcoin and billions of dollars in losses across the cryptocurrency industry. To date, many bitcoin miners, including those in Inner Mongolia and Sichuan, have been forced to permanently shut down their farms, and many bitcoin miners have relocated their operations to overseas regions that are more conducive to bitcoin mining.
On May 21, the country’s top brass officially stated that China would become the first country in cryptocurrency history to suspend cryptocurrency mining and trading activities.
The reason for the shutdown is due to the energy consumption of bitcoin mining, which uses more electricity in China than the Netherlands each year.
The country has been looking for ways to reduce its carbon emissions, while bitcoin mining still uses fossil fuels as its main source, and according to statistics, 8,000 megawatts of electricity has been restored in the country due to the shutdown of mining platforms.
Meanwhile, mining companies may relocate to North America and Europe. The blow, in addition to denting bitcoin prices, has also led to a sharp drop in the price of cryptocurrency mining equipment in China, which would have been the world’s largest producer and exporter of mining equipment.
“In the long run, almost all crypto mining platforms in China will relocate overseas as Chinese regulators crack down on mining activities at home.”
Prior to this crackdown, China accounted for more than 70 percent of the total global mining hash rate, but the current shutdown will eventually distribute computing power to foreign markets, particularly North America and Europe.
Some analysts predict this is good news for bitcoin, whose price and arithmetic power are often heavily influenced by domestic mining trends.
Crypto investor Lark Davis declared on Twitter, “We are experiencing a huge restructuring of miners, the largest and most severe crackdown ever in China. Expect a whole new geographic distribution of computing power in the coming weeks.”
There are currently over 3 tons of bitcoin miners weighing over 3 tons shipped from China to the U.S. Texas may host some of the Chinese mining companies. Texas is one of the top addresses for U.S. mining companies, with its affordable energy prices and huge investments in renewable energy making up 20 percent of the U.S. energy supply.
Miami’s mayor also launched plans in late May to make the city a bitcoin mining hub.
“The latest report from the South China Morning Post shows that GPUs are selling at a very high premium in early 2021. Six months later, after this crackdown, GPU prices have dropped by about 66 percent. Meanwhile, in Australia, the stock market for GPUs pulled back by 5-10% as the mining industry in the region began to heat up.
There are a number of factors that could influence miners to choose a new mine, starting with the low cost of electricity. Since mining is an energy-intensive industry, energy prices must be low enough for miners to make a profit, which means new locations must have low energy costs.
Another factor is the supply chain, having established technical management, and stable mining machines are all important.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/the-great-bitcoin-counting-migration-who-will-be-the-final-winner/
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