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Cryptocurrency is not just a one-off thing that would go away as soon as its hype dies down. The popularity of digital money surged even more during this ongoing global health crisis as people prefer cashless payments for fears that real-world money has the potential to carry the dreaded ‘rona. The rise in popularity of crypto has reached communist China and knowing the CCP, they don’t want that spotlight stolen from them. This resulted in the country imposing a clampdown on Bitcoin mining and other activities related to it. We all know what happened next, but what are other implications that are likely to follow?
The financial community is pretty much acquainted with the digital currency freefall that happened a week ago due to the above-mentioned ruling of China. Miners from that country were also badly hit by this as are now sending feelers that they’re moving out from the hot zone to calmer pastures.
A heavy blow to Chinese crypto miners
Notable miners have already suspended mining to the mainland and more are likely to follow. However, some are planning to take their mining operations underground.
That said, it is quite possible that this crackdown that the CCP imposed would create a competitive environment among mining big dogs as they are likely the ones to survive. This according to Waterdrip Capital’s co-founder Yushan Zheng. Further, he explained that locating suitable sites other than the ones they usually mine on would need a lot of resources like network and capital and this type of miners are the only ones that can carry those out.
North America, Central Asia are likely to reap the benefits
A huge chunk of crypto mining activities around the world is in China as it is believed to be around 70 percent. While the CCP is hammering it down through their regulations, miners from other parts of the globe will be benefiting from it, Reuters noted.
According to Innosilicon Technology Vice President and crypto mining rig maker Alex Ao, places like Central Asia and North America will have the advantage on this since both have sufficient power supply and policy support. Another mining machine maker and Senior Vice President of Canaan Inc. – Edward Lu – also felt the same as he revealed that he too is as of late looking at similar markets.
Behind all this new ruling from China, it is very much evident that its government is just paving the way for their digital currency – the digital yuan – to be the sole crypto of the land. Come to think of it, it’s centralized and developed by a communist government, not to mention that it has been very nosy with what its people are up to.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
