BitOoda Special Report, 5/21/21: China cracking down on bitcoin mining
BREAKING NEWS OUT OF CHINA: Vice Premier Liu He, in a meeting of the Financial Stability and Development Committee, announced on Friday that China will “fiercely” crack down on bitcoin mining and crypto trading activity to maintain the stability of the yuan exchange rate and fend off financial risks. Liu is one of the most powerful leaders in Beijing and arguably is President Xi Jinping’s top economic advisor; he has served as Beijing’s lead in the long-running U.S.-China trade negotiations.
We assess this announcement will almost certainly have an immediate impact on the crypto market writ large, and could significantly alter the global bitcoin mining landscape. For those in the mining ecosystem who are pushing for the global diversification of hash and the buildup of North American mining, this development could be extremely bullish. One critical question we will be monitoring is whether Beijing will allow existing miners to export their equipment (and associated hashpower) out of the country to new jurisdictions — this could be a key determinant of how the fallout from this crackdown will manifest in other global markets. Further, we assess that any relocation of Chinese mining assets would likely be a net positive for renewables consumption, and would serve to reduce the overall carbon footprint of the mining industry.
We will continue to keep our clients and partners apprised as we learn more.