Since the recent rise of crypto to new and unprecedented heights, different governments have taken different steps. Some: have attempted to ban cryptos, while others have somewhat accepted them, but of all the countries none are as concerned as China. For the past few months, China has been majorly cracking down on cryptocurrency and Bitcoin specifically. With many Bitcoin mining operations occurring in China, the government has had no issues figuring out what’s needed to be done.
The reasons for this are likely political and aim to keep China centralized under the CCP, rather than decentralized like how Bitcoin is. The very nature of the crypto is at odds with the political system in China. Since China has begun cracking down, more than 90% of mining operations in the country have ceased to a halt. Most recently, Bitcoin has sunk to a two-week low after reports that China has intensified its crackdown on cryptocurrency mining.
Not only is the actual price of Bitcoin going down, but China’s crackdown is causing a decline in Bitcoin’s hash rate (processing power) which has fallen sharply in the last month. Problematically for Bitcoin supporters, according to Blockchain.com, an estimated 65% of global Bitcoin mining is done in China. Not only does China seek to flex governmental powers over the cryptocurrency, likely seeking to steer competition from its state-backed cryptocurrency, but the rest of the world continues to be concerned with cryptos seismic environmental damage. The mining facilities take lots of power, oftentimes coal power. Just last month, these two issues were demonstrated together as a coal mine in the Xinjiang region of China flooded and shut down, wiping a quarter of Bitcoin’s hash rate offline. With all this going on are you still bullish on Bitcoin? And do you think crypto really is the future?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.