Bitcoin can’t catch a break. The attack continues. In China, the miners are running for their livelihood. The country pledged carbon neutrality by 2060, and they seem to think Bitcoin mining is in its way. The risks inherent to leveraged trading are also under review. This is the first time a high-ranking member of the Chinese government expresses a determination to act. Reuters reports:
A State Council committee led by Vice Premier Liu He announced the crackdown late on Friday as part of efforts to fend off financial risks.
According to the news service, mining pool BTC.TOP announced an immediate suspension of activities in China and expressed the possibility of relocating to North America. The crypto-mining operation HashCow took a softer approach, they just stated that they wouldn’t buy any new mining equipment. And Huobi’s mining pool service stopped serving the Chinese public. Bitcoinist reports:
The trading platform is now stopping some of its services in China. The list includes the majority of the exchange’s derivative trading features, including futures contract trading, leveraged investment products, and exchange-traded products.
In a statement, a Huobi spokesman stated that its limitations would allow the company “to focus on the expansion of [its] overseas presence.” The exchange also suspended the sales of its mining products.
Related Reading | Bitcoin Analyst Reveals What’s Holding Price Above $10K: Its China
Huobi is an ex-Chinese cryptocurrency exchange that, “moved its operations overseas to Hong Kong, Singapore, and South Korea, among others” in 2017. The year China banned cryptocurrency exchanges. Even though it has happened before, this new crackdown comes as a surprise. Just last month, the Chinese government seemed bullish on crypto.
BTC price chart on Coinbase | Source: BTC/USD on TradingView.com
A Change Of Heart Or Their Plan All Along?
Our sister site NewsBTC reported with enthusiasm that “a Chinese government official has recognized the value of Bitcoin and other cryptocurrencies.” The message now seems ominous and loaded.
The People’s Bank of China Deputy Governor, Li Bo, called these assets an important part of the future at the Boao Forum for Asia, per a report by Colin Wu.
Bo said Bitcoin and cryptocurrencies should be regarded as alternative investments and revealed China is studying regulatory policies towards these assets.
It’s evident now that “studying regulatory policies” was the important part of Bo’s declaration.
BTC hashrate from April 24th to May 24th on CoinWarz
Is BTC.TOP Migrating To Noth America?
The mining pool, also known as Lebit Mining, is already closed for business in China. Its operator, Jiang Zhuoer, insinuated that they were relocating to the U.S. according to Coingape. In the Weibo blog post they reproduce, Zhuoer said:
Mining in China may change from large to family miners, even if it causes 50% of the mining machines to fail to operate, there is no problem for the Bitcoin system. But the top mining pools may become European and American mining pools
The main message from the blog post is that Zhuoer considers that both Bitcoin mining and usage will remain permitted in mainland China, but only for small operations and private citizens. Financial capital is not allowed to participate. Nevertheless, he thinks that the government will give them the chance to relocate elsewhere and will not confiscate their machines.
Are those miners selling their BTC?
The short answer is: probably. Yesterday afternoon, investor and analyst Nic Carter detected unusual activity while monitoring the blockchain:
I'm seeing on chain evidence of (unusually high) miner selling leading this last leg down. anyone else able to corroborate?
— nic carter (@nic__carter) May 23, 2021
Later on, he confirmed that “Miner selling is a huge driver of price action here.” And then he recorded this video putting the situation into perspective. A couple of hours later, Mustafa Yilham seemed to corroborate:
4, Were miners selling Bitcoin? Some already panic sold, others had no choice. Not everyone have access to western hosting sites. There are also added level of uncertainty on current RMB OTC trading channels. Need fiat to cover operational costs at end of the day.
— Mustafa Yilham (@MustafaYilham) May 23, 2021
This was arguably the less interesting part of Yilham’s great thread on the subject, which concluded, “Under this current crisis, there will be a massive opportunity – redistribution of entire Bitcoin mining network around the globe. We need to make sure: majority of the mining machines are not going to single country.”
Does this opportunity appeal to you, dear reader? Are you ready to do your part?
Featured Image by Robert Nyman on Unsplash - Charts by TradingView