China stimulates the market movement
The main reason is that the energy needed to mine Bitcoin will not allow China to reduce carbon emissions by 65% by 2030. The country has also stated that it will become carbon-neutral by 2060.
However, many experts believe that other reasons have also contributed to this decision. For example, China insists that cryptocurrencies pose a threat to the country’s financial stability and monetary policy
The fact that this suppression of the BTC could destabilize the global crypto economy may have been intentional or just a side effect of these changes.
What will happen to Bitcoin mining operations in China and the global crypto economy?
The blow to BTC has already led to the unstable behavior of cryptocurrency tickers. For example, according to CoinMarketRate, the price of the asset fell from more than $50,000 at the beginning of May 2021, to a minimum of less than $30,000 by the end of June.
Concern about the recent downturn is natural. But if we consider that less than a year ago, the price of Bitcoin was below $ 10,000, the inherent volatility of the cryptocurrency becomes obvious. According to many experts, this is just a surge that the market will naturally correct.
Will China’s policy be positive for miners in other countries?
China’s repressive measures may have another unintended consequence: they can simplify Bitcoin mining for everyone else.
Computers mine cryptocurrency by solving complex mathematical and programming problems, and this process is called “hashing”. Since China controlled such a large percentage of Bitcoin mining machines, its tough measures give miners in other countries the opportunity to expand and become more critical for the cryptocurrency world.
According to Ryan Braun from CNBC.com, a significant reduction in the mining infrastructure of the BTC has made the mining process easier, and potentially more profitable.
Many Chinese cryptocurrency mining companies are now moving to other countries, including the United States. Meanwhile, the price of video cards, including Nvidia and ASUS, has fallen by more than 50% in many provinces of China. Bitcoin mining operations use powerful video cards, so the demand for this computer equipment has fallen sharply.
Many see this dramatic shift in the cryptocurrency markets as an opportunity to invest in Bitcoin and other digital coins. However, others believe that they need to wait for the markets to stabilize.
China is in the process of eradicating crypto mining in its country. This sounds like bad news, but in the long run it can only be very good for the cryptocurrency world. It’s just too early to talk about it.