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China is cracking down on cryptocurrencies, triggering an outflow of miners

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news: China has stepped up its crackdown, causing the price of cryptocurrencies to plummet.For some time, China has been increasing its supervision of cryptocurrencies, but it now appears that more than 90% of the country’s Bitcoin mining capacity will be shut down, according to Global Times, Issued by the Chinese government. On Friday, the Southwest Sichuan Province authorities ordered the crypto miners in the area to cease operations.

Yesterday, the Central Bank of China Announce It is ordering banks to crack down on cryptocurrency transactions.

effect: On the same day, the price of Bitcoin fell to $31,333—a 20% drop last week—because of increasing uncertainty about its future. According to data from the cryptocurrency trading platform CoinBase, other cryptocurrencies have also plummeted, and the value of the entire market has fallen by 12% in the past few days. These events also have an impact on hardware prices. Chinese consumers seeking to buy graphics cards, which are a key component of Bitcoin mining, have noticed a sharp drop in prices in the past day or so. Some prices plummeted by 66%. South China Morning Post.

Why now: China views decentralized and unregulated cryptocurrencies as a threat. The central bank stated that they “disturbed the normal economic order” and “increased the risk of illegal cross-border transfers of assets and money laundering.” It plans to become the first country to launch its own official digital currency, e yuan.

Another option: Bitcoin mining will not stop because of China’s repression. Instead, operators will relocate to other places. Texas Due to the relatively loose regulatory environment and cheap electricity, it has been touted as a place that can benefit from China’s new restrictions.

This story was first published in our daily newsletter “Download”. registered The most important technological developments are sent to your inbox every morning.

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