The likes of BTC.TOP and HashCow have reportedly halted operations in China following an intensified crackdown on bitcoin trading and mining by Beijing. Not only has the crackdown paused business, but it has also had a massive effect on digital currencies during a time when scrutiny of them is heightening on a global scale.
The latest crackdown is said to be a strategic method of fending off financial risk by State Council committees. China accounts for around 70% of the crypto supply around the entire globe, meaning this first-ever target is set to take an incredible toll on the industry.
Crypto mining pool BTC. TOP announced its suspension of business in China on the grounds of regulatory risks, while crypto exchange Huobi stated that they are turning their efforts to establishing business overseas upon their withdrawal from providing services to mainland Chinese clients. Hashcow has stated that it is set to suspend its purchasing of new bitcoin rigs.
A large portion of the new-found regulatory issues are because Crypto miners are using increasingly strong and bespoke tech equipment – often referred to as rigs – to certify virtual coin trades within a process which creates freshly minted cryptocurrencies, including the likes of bitcoin.
Speaking of China’s latest crackdown, Chen Jiahe, Chief Investment Officer of Beijing-based family office Novem Arcae Technologies, said:
Crypto mining consumes a lot of energy, which runs counter to China’s carbon neutrality goals.
China’s annual energy consumption with regard to cryptocurrency miners is estimated to reach its peak around the year 2024, hitting about 297 terawatt-hours – to put this into perspective, a recent study from Nature Communications suggested that this figure is greater than all of Italy’s power consumption in 2016.
Xi Jinping, President of China, has pledged an effort to reach carbon neutrality by the year 2060. Following a ban on crypto exchanges in Beijing back in 2017, China has already forfeited its position as a leading global crypto trading centre.
Predicting an uprising of European and US mining pools, BTC.TOP founder Jiang stated in a micro blog post via Weibo that:
Eventually, China will lose crypto computing power to foreign markets as well.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.