China’s crackdown on crypto mining has got digital analysts everywhere worried. According to many figureheads in the digital currency space, the prices of assets like bitcoin and Ethereum are about to crack even further given how far China has gone in banning BTC and crypto mining from its territories.
China Takes More Action Against Mining
China has always had a mixed relationship with cryptocurrencies. In the past, the nation has taken a stance against both crypto exchanges and initial coin offerings (ICOs), though the country was likely earning some solid revenue through bitcoin mining, as it allegedly hosted approximately 65 to 75 percent of the world’s mining operations. It was also home to both Bitmain and Canaan Creative, arguably two of the largest providers of digital mining equipment.
However, as of late, Beijing has implemented new methods of becoming greener, and – working to be more compliant with energy-friendly protocols – China is seeking to remove all bitcoin and crypto mining firms from its territories, saying that they must leave their borders or shut down for good.
It is an ugly sight to see, with many companies now completely displaced and the prices of major cryptocurrencies such as bitcoin and Ethereum going down the tubes. However, it does not look like China is just stopping at forcing all mining companies to leave. Now, it appears the country is dumping CPUs, meaning even if China were to go back on its bitcoin mining ban in the future, it would not have the resources to support the space any further.
Several analysts are worried that the country is being too rash in its decision to end all BTC mining. Adam James – a senior editor at the Hong Kong-based BTC and crypto exchange OKEx – explains:
China seriously cracked down on bitcoin mining in the country… The development may be interpreted as fundamentally bearish, nonetheless.
The nation is also taking other measures like stopping all banks and standard institutions from providing financial services to crypto companies. It is also blocking access to major exchanges such as Binance, which recently reported users having to utilize VPNs to gain entry to their accounts. Ethereum has fallen into the low $2,000 range from $4,000, while BTC is trading for half its $60,000+ April value.
Do More Bearish Trends Await?
Alex Kuptsikevich – a senior financial analyst at FX Pro – said:
There is a summer lull in the crypto market which may just be the calm before the storm… If the market is affected by a small number of open positions, then any small storm could turn into a largescale selloff, disrupting an avalanche of stop orders, but the most alarming thing for crypto enthusiasts is that such an outcome will underscore the prolonged nature of the correction, increasing speculation around a new ‘crypto winter’ like in 2018.