The news: China’s intensifying crackdown has sent cryptocurrency prices down. China has been developing its regulatory regulation on cryptocurrencies for some time, but it now appears that more than 90% of Bitcoin’s mining capacity in the country is closing, according to a report in the Global Times, which is published by the Chinese state. Last Friday, authorities in the southwestern province of Sichuan ordered crypto miners in the region to cease operations.
Yesterday, China’s central bank announced was ordering banks to resume cryptocurrency trading.
The effects: On the same day, the price of Bitcoin fell to $ 31,333 – it fell by 20% last week – amid growing uncertainty about its future. Other cryptocurrencies have fallen as well, and the entire market has fallen in value by 12% in the last two days, according to cryptocurrency exchange platform CoinBase. These events also have an impact on hardware prices. Chinese consumers looking to buy graphics cards, which are critical components for Bitcoin mining, have found much lower prices in the past. Some prices had dropped as much as 66%, according to the South China Morning Post.
Why now: China sees cryptocurrencies, which are decentralized and not regulated, as a threat. Its central bank said it had “disrupted the normal order of the economy” and “increased the risks of illegal cross-border transfers of goods and illegal activities such as money laundering”. It is set to become the first country to launch its own official digital currency, the e-yuan.
Another alternative: Bitcoin extraction will not stop due to China’s repression. Instead, operators will move elsewhere. Texas it has been touted as a place that could take advantage of the new restrictions in China, thanks to its relatively relaxed regulatory environment and low-cost electricity.
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