China has been the crypto hotspot for the past few years. China was the first country to adopt cryptocurrencies. However, after acknowledging the volatile characters of cryptocurrency, china suspended the ICO in 2019.
ICO refers to initial coin offering, subsequent two years of banning ICO, China has now announced cryptocurrency crackdown in the country. The cryptocurrency crackdown of china banned cryptocurrency exchange and other financial institutions. All the more, Chinese authorities counselled traders and investors in contradiction of speculative digital currency trading.
According to Investopedia, these attempts were only performed to compress the cryptocurrency trading market. Regardless of the china cryptocurrency ban, bitcoin traders are making considerable money. There are websites like Yuan Pay Group Official Site that is helping people in making a very handsome profit in bitcoin trading.
You might be wondering how a crypto-free nation influences the market value of cryptocurrencies. However, regardless, china’s attempt to deter its financial infrastructure from cryptocurrencies. As a result, the country still applies a gigantic influence on the price of cryptocurrencies.
Was it a Ban?
China influences cryptocurrency valuation in multiple ways. One of the protuberant ways is through bitcoin trustable exchange. Although China imposed a cryptocurrency ban in 2017, it contributed a lot before the ban. The low transaction levied by the trustable exchange is one of the prominent reasons.
The jointed committee of china announced an intensified crackdown on cryptocurrency mining in China. After the cryptocurrency crackdown in China, some of the largest trustable exchanges of china altogether suspended their services. The recent cryptocurrency crackdown in China has increased the complications in buying them.
Cryptocurrency runs on a fragile network; the price of these digital token depend upon multiple factors. Therefore, supply plays a huge role in determining the valuation of a digital token. Since China is the cryptocurrency hotspot, it wheels the supply of famous digital tokens like bitcoin with the assistance of mining activities. Yes, china announced a ban on bitcoin mining. However, regardless of the bitcoin mining ban, more than 60% of cryptocurrency mining activities are established in China.
Bitcoin mining pools contribute to an exceeding extent in the cryptocurrency industry. The largest bitcoin mining pools of the world include bit main, which is a Chinese based firm, and it contributes 40% of the hash rate in the global bitcoin mining chain. Since it contributes nearly half the hash rate in the global bitcoin mining chain, it is considered the most powerful firm in the entire cryptocurrency ecosystem.
Since the mining process regulates the supply of a cryptocurrency, it plays a significant part in defining the cryptocurrency price.
Even bitcoin mining consumes an enormous chunk of electricity and energy. Miners are earning gigantic profits from bitcoin due to skyrocketing prices.
Chinese bitcoin mining activities correspondingly influence the other altcoins.
In a nutshell, China plays an essential role in the digital currency industry. China is equipped with multiple levers. With this, it regulates the value of cryptocurrencies—however, bitcoin and others. Cryptocurrencies are not entirely relied on in china. China might become the most potent cryptocurrency hotspot despite a cryptocurrency crackdown and will continue affecting the cryptocurrency market.
Did the Bitcoin mining ban change the mining industry in any possible way?
The bitcoin mining industry was impacted to an exceeding extent by the bitcoin mining ban in China. However, the impact was temporary and only lasted for a few months. The cryptocurrency crackdown ultimately led to a massive slump in the hash rate of the bitcoin mining chain globally. The hash rate remained 15 trillion hash for a few months.
However, as per the recent reports, despite a cryptocurrency mining ban in china, miners from china are making immense profits. Not only bitcoin miners but also ASIC and exceptional bitcoin mining rigs manufacturers generate revenue worth millions of dollars. So mining industry in China is expanding day by day.
Undeniably some of the major mining pools left the country after the announcement of bitcoin mining. However, recently one of the largest bitcoin mining pools moved to Texas for continuing the mining progression.
Miners from China are either moving to Kazakhstan or Texas as the electricity cost in these countries is significantly less. Undeniably, not less than China, but Texas offers many facilities to the bitcoin miners. In addition, Texas’s higher authorities have tweeted that Texas will soon become a bitcoin mining hub.