Analysis: Bitcoin Mining Revenue Plunges As China Crackdown Continues
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It’s not been a great week for Bitcoin miners in China, particularly in Sichuan province.
As Bitcoin mining and trading crackdowns spread throughout the country that accounts for about half of all the bitcoin supply, total hash rate and miner revenue have fallen to 2021 lows – down 16% and 28%, respectively.
It all began in April, following Vice Premier Lie He’s call for a “crack down on Bitcoin mining and trading behavior.”
In an update sent to investors earlier this week, Singapore-based QCP Capital said it expects the shake-up to continue reverberating throughout the lower levels for a few more weeks to come. “Globally we are seeing a much more forceful crackdown on crypto by governments,” the firm said.
The shutdowns themselves have been happening in waves. Just last week, the local government in Sichuan, the second largest mining center in China after Xinjiang, issued its ban.
“Many miners are exiting the business to comply with government policies,” Mike Huang, a Sichuan crypto mining farm operator, told Reuters.
“Mining machines are selling like scrap metal.”
That has, of course, kicked off a round of solicitations from government officials in Bitcoin-friendly cities and countries.
Among the suitors: Miami, where Mayor Francis Suarez says miners would have access to plenty of cheap nuclear power; Kazakhstan, where Chinese ASIC manufacturer Canaan recently set up a sales center; and El Salvador, where President Nayib Bukele says geothermal facilities powered by the country’s volcanoes would offer cheap, green energy.
“I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos,” President Nayib Bukele tweeted at the start of June. “This is going to evolve fast!”
It’s not been a great week for Bitcoin miners in China, particularly in Sichuan province.
As Bitcoin mining and trading crackdowns spread throughout the country that accounts for about half of all the bitcoin supply, total hash rate and miner revenue have fallen to 2021 lows – down 16% and 28%, respectively.
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