Generative Data Intelligence

China’s Ban of Bitcoin Mining is Now Just a Hashrate Blip


China sent bitcoin’s hashrate diving in May-June 2021, while its price halved from $60,000 to $30,000.

Close to two years on however, the only effect that had was that no block was found for an hour and 11 minutes.

The bitcoin network continued to work fine thereafter, while the hashrate recovered in just months and now has made a new all time high to near 300 exahashes per second (EH/s).

That bitcoin mining ban therefore has become just a blip in the chart even as the industry transforms.

Even BlackRock is now involved in crypto mining, or it was, with it investing in the now bankrupt Core Scientific.

Blockstream, which used to be focused mostly on code development, now makes more money from mining, raising $125 million recently from Kingsway Capital and Fulgur Ventures.

Most miners are now publicly traded, something that used to be very rare and even non-existent prior to the 2021 bull. That allows them to hold more in bitcoin as they can raise capital from the stock markets.

Countries like Kazakhstan have been one of the beneficiaries of China’s mining ban, with it recently passing a Law on Digital Assets of the Republic of Kazakhstan.

That implements licensing requirements for miners as well as a higher price for electricity. While USA, which barely used to have any miners, now sees the industry thrive.

Likewise for Europe, but asics manufacturing continues to be mainly in China even though by their policies it can only be for export.

No significant western supplier has yet arisen, allowing China to potentially exert one last influence by banning asics manufacturing.

The country for now however is looking for a reset with there being some signs they are loosening up as Chinese citizens have become a bit more visible online.

There’s even speculation they might re-open crypto exchanges in Hong Kong as a prelude to re-opening in China.

The latter seems unlikely anytime soon, but China now has a lot less influence to negatively affect this space, while having plenty of room to positively contribute.


Latest Intelligence