China has for long been one of the biggest crypto miners around the world. Recently, the new rules regarding crypto mining in the country have left many miners leaving the market. The Incredible Mining Movement, which is a name that many crypto enthusiasts are calling China’s crackdown, started in May after the public regulator started a massive crackdown on bitcoin mining and exchanging in the country.
The process is still ongoing, but what does it mean for other crypto mining hubs around the world?
2021 has been a successful year for crypto already. The year started with a massive crypto price boom, sending the largest crypto in the market, bitcoin, to all-time highs. The April, bitcoin was selling for over $64,000. Many other cryptos increased in price as well.
However, China’s new rules are affecting the crypto mining market a lot. Recently, the majority of mines in Southwest China, Sichuan Province, which is the country’s largest crypto mining base, were closed.
The steps taken by the Chinese authorities mean that as much as 90 percent of the mining capacity of the country is expected to be shut down. Although some hoped that the laws would have a software impact on the leading mining region of the country, this idea was proved to be wrong by the recent steps taken in the Sichuan region.
Despite some benefits to the local economy, the authorities of the country are determined to curb crypto mining as well as trading to control the financial risks.
New laws in China
The new crypto mining and trading laws in China perfectly display the attitude of the Chinese authorities towards the crypto market. The steps taken by the authorities are a clear indication that the country wants crypto miners out of the country, in fact, it wants them to leave the market as fast as possible.
The regulatory agencies of the Sichuan Province told miners on Friday to make sure to screen, clean up, and terminate all mining operations by Sunday.
According to the notice that the regulators put out, they have screened as many as 26 firms that were reported as potential crypto mining enterprises. In addition, the regulator also addressed the electricity companies to immediately stop supplying the crypto mining projects that were detected. Local authorities were also banned from approving new mining projects in the region.
Why was such a decision made?
While the demand for crypto trading drastically increases around the world, the Chinese authorities have decided to curb crypto mining altogether. These steps come after the huge crypto price boom and the further popularization of the market.
Around the world, cryptos are slowly getting closer to widespread exposure and they are closer to the mainstream than ever before. Thanks to the online crypto exchanges, almost anyone can invest in the market today.
Also, there are many software development companies that have created trading bots for crypto investors. The main aim of such robots is to make trading easier for everyone. One great example of such robots is the crypto trading bot of Bitsgap, which is capable of analyzing the market in just a few minutes.
In addition to analyzing all the important things that are happening in the market, the Bitsgap bot for Bitcoin and other cryptocurrencies is also capable of opening buy and sell positions when the best conditions arise in the market.
While crypto trading is becoming so much easier and accessible for everyone, China is distancing itself from the crypto market as much as it can. The authorities of the country claim that such decisions are made because of the best interest of traders, to make sure that they are not opening themselves up to the risks that come with volatile markets such as crypto trading.
What does it mean for the crypto market worldwide?
China for long has been the biggest crypto mining market in the world and such steps taken by the country’s authorities are thought to have a huge impact on the crypto trading market globally.
For example, the steps taken by the Chinese authorities might be a distinct advantage for many regions around the world, such as the USA for example, specifically, Texas. Mining is a very high-energy consuming interaction that includes both making new coins as well as keeping a log of all the exchanges and transactions in the market.
In fact, Texas has a portion of the world’s least energy costs in addition to a lot of renewables developing in the state. In fact, 20 percent of the energy force of Texas is coming from the wind starting from 2019. The steps taken by the Chinese authorities might help crypto mining to develop in Texas.
China has long been the biggest player in the crypto mining sector. In fact, as much as 65 to 75 percent of the world’s bitcoin mining occurs in China. Mostly in the four regions of the country, which are Xinjiang, Inner Mongolia, Sichuan, and Yunnan.
Brandon Avanaghi, who was a security engineer of Gemini said previously that the world is going to see a dramatic shift over the next few months. According to him, there are many officials in the USA who are promoting mining, such as governor Greg Abbott in Texas. In fact, Arvanaghi went as far as saying that crypto mining is going to become a real industry in the United States.
China started its crackdown on crypto miners in Inner Mongolia. The main reason for this was the region failing to meet the climate target of Beijing, as a result of which, the leaders of the province called on the bitcoin miners to leave the market in a two-month period. The region leaders blamed crypto miners for missing the Beijing climate target.
Where the miners who had to leave China will go is still very much unclear, however, they are more likely to aim for regions with the cheapest energy.