In China’s Sichuan province, at least 26 Bitcoin mining farms have been affected by no longer being provided for by state-owned electricity companies. This seems to be having an impact on the Bitcoin hash rate.
A few weeks ago, word came out of China that the government was going to restrict Bitcoin mining. According to media reports, at least 26 Bitcoin mining farms are now facing extinction in Sichuan province. By decree, state-owned electricity companies there were obliged to no longer supply a list of registered Bitcoin mining farms. The measure was to be implemented by June 20. In fact, the data shows: The Bitcoin Hash Rate has declined noticeably in recent days. It measures how much computing capacity is being used for Bitcoin, and so far, much of it has come from China.
According to the information, the regulatory crackdown in Sichuan is focused on hydropower plants. The province, located southwest in China, is known for its large-scale power plants, which are also used to power other energy-intensive industries such as steel and iron. Since there is a lot of electricity from sustainable sources available there, especially during the rainy season, Bitcoin miners had even been targeted. They may be surprised by the de facto ban, as the new policy line was supposed to be to stop Bitcoin mining where the energy comes from coal-fired power plants and other fossil fuel sources.
Yunnan province is also apparently working off a list that has registered bitcoin mining farms checking who they get what electricity from. Observers believe that for smaller Bitcoin mining farms it is currently still possible to get electricity from private energy companies and stay under the radar of the authorities. Still, one thing is clear: For years, official China had tolerated Bitcoin mining. Therefore, an entire industry has developed there, which also includes the production of Asic Miners and the leasing of computer capacities. Whether the big Chinese Bitcoin miners will now have to look for alternative options or shut down their business is a big question for the crypto industry.
Conclusion: China and Bitcoin – the situation is changing.
There had been several government initiatives in China in the past to restrict Bitcoin mining. But these largely fizzled out into nothing. This time, however, there is a noticeable crackdown. In the medium and long term, this could lead to Bitcoin mining becoming competitive again in Western countries, where the price of electricity is significantly higher than in China. In addition, Bitcoin miners should focus more than before on electricity from renewable energy sources.
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