The heads of the world’s largest cryptocurrency exchanges said that Bitcoin miners are moving out of China after… The authorities intensified their campaign on the sector.
“We are seeing a lot of these miners move from China to other places and some of them are sending their mining equipment to other places,” Changpeng Zhao, CEO of Binance Holdings Ltd, the world’s largest crypto exchange by trading volume, said in an interview at the Qatar Economic Forum on Tuesday. Abroad, there are large shipments,” Bloomberg reported.
Zhao added that he has seen movement by customers in Binance’s mining pool, which combines the computing power of number-processing machines that verify cryptocurrency transactions.
Chinas moves sparked uncertainty in the cryptocurrency market, and caused Bitcoin to pull back to the lower bound of its recent trading range, with the coin briefly dropping below $30,000 on Tuesday, after hitting nearly $65,000 in the middle of the year. April.
The hash rate, which measures the processing power used to mine Bitcoin and is used as a factor for mining activity, has fallen by about 40% in the past two weeks, according to data from BTC.com.
“Going forward we will have a different geographic distribution of hash power,” Sam Bankman-Fried, a former Jane Street trader who now runs crypto derivatives exchange FTX, said in an interview on Thursday. “Moving mining equipment is expensive but not impossible.”
The Global Times reported that several bitcoin mining centers in Chinas Sichuan province were closed on Sunday, as authorities ramped up their crackdown there. On Tuesday, Bloomberg reported that China had summoned officials from its largest banks to repeat rules banning cryptocurrency services that were first issued in 2013.
Chinese measures mean that the country’s share of bitcoin mining could drop from 65% to less than 50% by the end of the year, according to Dan Weiskopf, co-purse manager at Amplify Transformational Data Sharing ETF, an actively managed trading fund made up of shares linked to the blockchain. Cryptocurrency mining accounts for 20% of his portfolio.
Alternative destinations for Chinese mining operations include Russia, Kazakhstan and Texas, according to market participants. Weiskopf cited Canada, Sweden and Argentina as other possibilities.
“The decline in retail is likely to be a short-term phenomenon and evidence that Chinese miners are out of service,” he said in an email.
“It’s a positive factor for North American miners who are expanding now and are set to have a significant online share later in 2021 and into 2022,” he added.