China’s recent decision to ban the mining of Bitcoin in the country has certainly sent shockwaves throughout the cryptocurrency community. However, perhaps the most affected by this are the miners themselves, and while the ban has yet to be put into place, it has nevertheless driven many of the miners to enter a state of severe panic. As a result, some have already sold off any tokens being held, whereas others are now considering operating overseas.
Mustafa Yilham, the leader of Chinese BTC mining firm Bixin, stated that numerous miners have already begun the process to operate overseas within the previous two days alone. Furthermore, we can expect a substantial amount of BTC mining machines and rigs to be available for purchase, he added. Lastly, Mustafa also stated that certain actions and decisions pertaining to enforcement are anticipated within the next few weeks, although the severity of the enforcement remains unclear at this point in time.
Nevertheless, this entire situation has indeed created a bearish sentiment as far as the Chinese miners may be concerned.
Big trouble in China
Primitive Ventures’ founding partner, Dovey Wan, stated via Twitter that many local miners have already messaged her privately about the sales of their respective machines as well as help in shipping them overseas.
As of this point, BTC.top, a mining pool based in China that also accounts for nearly 1.5% of BTC’s overall hash rate, has commented that its brokerage business specializing in providing mining tools and equipment will no longer be serving any customers based in mainland China due to the ban. Furthermore, Huobi (a popular cryptocurrency exchange) also decided to no longer provide the abovementioned brokerage service for any new users who are based in mainland China. However, the mining pool business will nevertheless still be operational.
BTC hash rate being used to back tokens
As expected, the ban has also had an effect on the tokens backed by the hash rate as well, with these particular tokens being issued by the miners. The token holders would normally be entitled to mining rewards which coincide with the overall amount of the hashing power that the tokens themselves would represent. This also hence offers an indirect way of gaining exposure to BTC mining itself.
Lastly, not only had the recent mining accident in Xinjiang highlighted the environment’s instability, but the ban also has had a catastrophic impact on the cryptocurrency market. In particular, the exchange tokens run by OKEx, Binance and Huobi had decreased by over 30% this past weekend.
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