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- Crypto miners prohibition could be a trillion-dollar loss for China in accordance to Michael Saylor
- Saylor believes China has made a geopolitical mistake by prohibiting crypto miners
- The recent Chinese regulatory scrutiny has caused a more than trillion-dollar wipe out from the cryptocurrency market
- North American Bitcoin miners have received an opportunity of increasing their income as Chinese miners went offline
Crypto market has been facing severe turbulence since the mid-last month. Bitcoin lost more than 50% of its value from its last all-time high level. The impact of the leading crypto asset showed its impact on the entire altcoin market. High power consumption by Bitcoin and cryptocurrency miners’ hash race to secure and verify transactions remained a major reason for the price crash. Following the scenario, Chinese regulators crack down on the digital assets miners. Michael Saylor, the CEO of MicroStrategy, deemed that such steps taken by Chinese regulators could be a trillion-dollar mistake.
Is China making mistakes by prohibiting crypto miners?
On Saturday, Michael Saylor had an interview with Bloomberg TV, where he pointed out the Chinese crypto concerns. According to the MicroStrategy CEO, following the growth rate of Bitcoin, it seems China’s measures could be a trillion-dollar mistake. He further explained that China has 50% of the Bitcoin market share, and the flagship cryptocurrency has shown a 100% year-over-year growth.
Saylor stated that it seems to be a tragedy for miners in the Chinese region. And deemed that prohibition of mining operations are geopolitical mistakes for the country. Hence, the Chinese government could have created trillions of dollars with the help of miners.
Cryptocurrency market saw a $1 trillion wipe-out
The Chinese crackdown and Elon Musk, the CEO of Tesla’s concerns regarding mining’s impact on our environment, have caused the recent crash. These aforementioned issues have caused a more than trillion-dollar wipe out from the entire crypto market.
China is estimated to dominate 50% of the total mining hashes available. However, due to strict regulations, miners began to allocate their operations from the region. Moreover, few miners had to shut down their businesses due to such concerns.
Last weekend the price of Bitcoin fell sharply as 90% of the miners in China’s Sichuan province were shuttered. According to Saylor, the scenario remained a nuisance and a dislocation for bitcoin in the near term.
Western investors have a bigger opportunity
Saylor explained that residents of China had to sell BTC under forced liquidations and with a timeframe because they had to get out of the country. Moreover, all the loans of such investors got pulled. Following the scenario, it seems a bigger opportunity for Western investors.
On the other hand, after China, the United States has emerged as one of the primary destinations for crypto miners. Francis Suarez, the mayor of Miami, revealed last week that he is lowering the electricity cost to attract miners in Florida.
Chinese concerns could profit North American miners
Saylor believes that the Chinese measures on crypto firms are a great windfall for North American miners. When the Chinese miners went offline, the income of North American miners surged by 50% or 75%.
However, Colin Read, the former Plattsburgh mayor, believes that mining operations don’t bring any advantage for the residents. He explained that when miners entered the city, the cost of electricity surged due to their heavy usage. Ultimately, the government then had to distribute the cost among residents.
Big investors are purchasing the dip
Last week, MicroStrategy revealed that it is holding more than 100k BTC. The firm invested about only $500 million for a few 13k BTC coins for the last purchase. However, Saylor claimed that he could have paid more for those coins. Not only MicroStrategy but several other institutional investors are also found buying the dip.
