China’s recent decision to ban crypto mining and trading operations within the country has had a widespread impact on the crypto markets. The crypto market extended its losses on Sunday, May 23, with its valuations hitting a 3-month low.
Just as Beijing steps up its regulatory efforts in the crypto space, local Bitcoin miners of China have started suspending the operations in the home country. This has further put downward pressure on BTC and the overall crypto space. As we know, China alone accounts for 70% of the total crypto mining market worldwide. Thus, if the Chinese miners decide to turn off their rigs, even for a short time, the effects of the same can be far-reaching.
On Sunday, May 23, Huobi Mall, the subsidiary of crypto exchange Huobi announced that all of its custodial business has been suspended. Huobi Mall is planning to move its rigs to an overseas market out of China. In a Telegram community, it announced:
“Meanwhile, we’re contacting overseas service providers, to pave way for exports of mining rigs in the future. Not to worry and calm down.”
Huobi Pool stated that it will stop providing services to Chinese users. Those who have already purchased Bitcoin mining machines will be removed from the shelves, a interesting thing is that Huobi said that FIL mining machines will not be affected. pic.twitter.com/B62PII7pmB
— Wu Blockchain (@WuBlockchain) May 23, 2021
China Losing Crypto Mining Business to North America, Europe
Citing the regulatory crackdown, BTC.TOP, one of the biggest crypto mining pools also announced the suspension of its China business. Founder Jiang Zhuoer, said that they are planning to move the operations to North America, reported Reuters.
“In the long term, nearly all of Chinese crypto mining rigs will be sold overseas, as Chinese regulators crack down on mining at home”. Referring to China’s 2017 ban on crypto trading, Jian further added that China lost is position four year back are a global leader in crypto trading. “Eventually, China will lose crypto computing power to foreign markets as well,” Jiang said.
Jiang expects China to lose its business to the European and the North American market. Crypto Miner HashCow owns nearly 10 mining sites in China’s dominant mining regions like Sichuan and Xinjiang. Although the miner has pledged to comply with the new regulations, it has pulled the plugs on buying new Bitcoin rigs and announced to refund its investors who recently placed orders for computing powers but haven’t yet started buying.
On Sunday, the BTC price crashed another 10% followed by the Chinese crackdown. BTC price dropped close to $33,000 with the entire crypto market tanking over 10%.
Even some of the Chinese crypto exchanges like OKEx and Huobi have started limiting their services to local Chinese investors.