Cryptocurrency: prices are falling, Bitcoin hashrate is falling and China is taking miners off the grid

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Cryptocurrencies like Bitcoin are under sustained pressure at the beginning of the week. After price losses over the weekend, things continued to decline on Monday. One reason for this could be China’s increasingly tough course against the crypto-money miners in the country. In addition, observers referred to the generally battered mood on the financial markets.

Bitcoin, the strongest digital currency on the market, fell by around eight percent on Monday to just over 32,000 US dollars. The second largest cryptocurrency, Ether, lost even more of its value and fell below the $ 2,000 mark. Other digital stocks such as Ripple or Dogecoin also fell sharply.

China is apparently taking ever more rigorous action against the mining industry and its data centers. Already in the past week there had been reports from individual regions that were against the mining front almost daily. How high China’s share of global mining performance is, or used to be, cannot be precisely quantified due to the decentralized nature of the Bitcoin network. Earlier estimates, which certainly no longer reflect the current status, were based on around two thirds.

The chinese newspaper Global Times, which is considered to be the mouthpiece of the Communist Party, reportsthat the authorities expect to take around 90 percent of the country’s mining capacity off the grid in the short term. The mining activities were mainly concentrated in the provinces of Xinjiang, Inner Mongolia, Yunnan and Sichuan, all of which, according to the report, have all passed regulations to curb prospecting. Voices on social media also testified to the pressure on the miners.

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At the same time, a major exodus of mining operators seems to be starting – away from China, for example to neighboring Kazakhstan or the USA. Here has Reports according to, among other things, the US state of Texas excelled with crypto-friendly policies under Governor Greg Abbott. But the small Latin American state El Salvador, which recently made Bitcoin its official currency, wants to attract prospectors with cheap electricity from geothermal energy.

The mining performance shows quite well how the industry is currently under pressure. The accumulated hashing power fell according to figures from Blockchain.com since mid-May by around 30 percent and reached an eight-month low. Large Chinese mining pools such as Ant-Pool and Huobi saw significant drops in pooled performance.

But it doesn’t just have to be because of tough regulations in China. Likewise, lower prices also ensure that the miner’s reward for a new block is worth less. If the calculation is no longer correct, miners pull the plug elsewhere in the world as well. Financial pressure on miners is also not a good omen for the rate of proof-of-work currencies like Bitcoin. Because if you are under financial pressure, you may throw the mined coins onto the market faster than the market can absorb them.

In any case, the major cryptocurrencies have moved away from their record levels in the past few weeks: Bitcoin rose to almost $ 65,000 in mid-April, while ether cost more than $ 4,000 for the first time a little later. Compared to last autumn, however, the prices are still significantly higher.

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