China’s Bitcoin Market Faces Huge Downfall Amid Covid-19

  • Reports from Chinese agencies state that this week there was a 15% decrease in Bitcoin’s value.
  • The global coronavirus pandemic has made the market more prone to vulnerability in China.
  • There are many sources, which suggest that the miners are likely to migrate away from China.

Things do not look good in China as they are about to lose their control over the Bitcoin market. Reports from Chinese agencies state that this week there was a 15% decrease in Bitcoin’s value.

Impact of Covid-19 on Chinese Market

The global coronavirus pandemic has made the market more prone to vulnerability in China. The price had reached a $3800 mark during march forcing many miners to shut down their business because of the slipping profitability. According to a recent report, over 40 mining businesses have been compelled to shut down as the Antminer S9s are providing them with no profit at all. Around 2.3 million Antminers have shut down since the past two months of the Covid-19 spread.

Apart from hosting equipment miners have to pay heavy cash for the electricity bills ranging from 0.03 to 0.05 USD per kilowatt-hour. The heavy degradation of the Bitcoin’s value has made the circumstances for mining impossible even though low electricity rates influenced the growth of the Bitcoin market, majorly contributing to its hash rate.

The CEO of blockware solution, Matt D’Souza has reported to a news agency that not only has the pandemic caused the downfall of the hash rate, there is also a hurdle for the global supply chain. Hash rate is basically the measuring unit of the network’s processing. The more the hash rate more is its network security. When the market again full-fledged opens, there might be many difficulties because of the delay in the next-gen rigs.

Predictions on Miners’ Moving Away From China

There are many sources, which suggest that the miners are likely to migrate away from China. When it comes to the digital market, China has always taken a lead. However, this might just add up to the ill-luck of the country. The US has always provided backup and support to the mining industry whenever needed. However, there are some instances where the Chinese government has allegedly shut down mining operations.

Further, China had removed the mining industry from the list of unwanted industries after seeing the great amount of craze and interest of the miners. However, Xu had said that the miners are moving away. According to him, China’s landscape is not suitable for mining. Miners may move their business to the Eastern countries where electricity would be much cheaper. But the prices are not the only factor that helps in the growth of the mining industry. Countries like the USA have faster internet services which boost the development of the companies.

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