Their cash flows would immediately dry up, and the resale value of their GPUs will drop significantly. What this means for crypto miners is that Ethereum miners have a very high risk that their machines become obsolete overnight. It is very possible that if this transition to PoS does occur as recently announced, the graphics card market will be flooded with cheap used chips from miners. These miners will have to transition their graphics cards to mine other coins that are profitable with their equipment, and those coins are significantly smaller than Ethereum, in addition to likely being less profitable to mine. When this transition occurs, it will be very destructive for miners who are currently mining Ethereum. The difficulty bomb is now estimated to occur around June 2022, and many in the community expect the transition to proof of stake to finally occur. The difficulty bomb exponentially increases mining difficulty at a certain block height, and it essentially freezes the chain and forces a hard fork. had become the largest Bitcoin mining market, overtaking China.Given the specialized nature of Ethereum mining, it would be our bet that those miners will leave the market completely. ![]() By July, Bitcoin's hash rate was well on the way to recovery by October, the U.S. While the initial crackdown led to miners in the country shutting down their operations and a crash in Bitcoin's hash rate, many miners have since relocated overseas. Cryptocurrencies, operating as they do without the control of a centralized authority, present a direct challenge to the adoption of the DCEP.īut China's Bitcoin mining ban hasn't succeeded in killing off the cryptocurrency once and for all. Secondly, China is in the process of launching its own central bank digital currency, the digital yuan or DCEP, a centralized digital currency operating under the control of the People's Bank of China and the Commercial Bank. ![]() First, mining proof of work cryptocurrencies such as Bitcoin is an energy-intensive activity, with one study in early 2021 indicating that the activity could derail China's emissions reduction targets. In May, three of the country's payments and financial associations reiterated a ban by the central bank on financial firms engaging in cryptocurrency transactions, and urged investors against crypto trading, describing it as a "speculative" activity.ĭays later, Huobi announced that it would suspend futures contracts, exchange-traded products, and leveraged investment products to new users in some countries and regions, and that it would no longer sell mining machines and related services to new users in mainland China.Ī month later, the central bank called for Chinese banks and payment institutions to stop providing an array of cryptocurrency services, including opening accounts, transactions, and settlements.Ĭhina's rationale behind clamping down on cryptocurrency is twofold. As crypto miners were directed to shut up shop by regional authorities, China's State Council included Bitcoin mining in a list of financial risks that required monitoring. China's crypto crackdownĮarlier this year, the Chinese government embarked on a sweeping crackdown directed against the country's crypto industry. ![]() "We are very comfortable in Asia and we are the leader here, but we need a new emphasis, we need to go global," Jun told the FT.Īccordingly, the exchange is looking to quadruple its headcount from the current 1,000 as part of its efforts to expand globally. To offset the loss in revenue from the Chinese market, Huobi plans to expand its offering in other countries.
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