As an online trading enthusiast, you undoubtedly know that the cryptocurrency journey has its wild ups and downs. For now, Chinese investors are the victims following crypto clampdowns that banned them from crypto-associated activities. However, why is China employing stiffer rules in the crypto space? What are the benefits to other nations?
Firstly, China has been skeptical about cryptocurrency since long ago. In 2013, the Chinese central bank banned financial firms from involving in Bitcoin accomplishments, including mining. In 2017, the country saw increased illegal monetary activities involving digital coins for money laundering deals. For that reason, China is now amplifying its efforts to prevent dirt games that might affect China’s digital marketplace.
The Sichuan Province has been a renowned crypto mining hub because of its plenty of water that can produce hydroelectricity, a vital factor in promoting renewable services as most regions plan to embrace green energy. However, China banned everything as far as cryptocurrency is concerned at the moment. That includes any sources of power used in Bitcoin mining facilities.
Benefits of Crypto Clampdown to China and Other Nations
China’s crackdown aims to protect the citizens from the risks that might come with virtual coins. Keep in mind that the crypto market is highly volatile. Influencers and billionaires such as Elon Musk can control the market direction. You probably saw how BTC tumbled following news that Tesla would bank crypto in its car deals. The crackdown news and environmental concerns had Bitcoin dropping below $30K since hitting its record high in April.
Miners have to locate other crypto-friendly regions after China banned mining activities in the nation. For instance, a mining giant based in Beijing Canaan has established its headquarters in Kazakhstan, known for its cheap power. Keep in mind that Kazakhstan ranks fourth globally as far as hash rate distribution is concerned. China ranks first, followed by the United States (second) and Russia (third).
Market experts expect North American mining companies to feel the increased mining volumes. That would translate to increased gross returns due to China’s crypto clampdown.
Remember, China is in a move to launch its digital Yuan that would support CBDC. The China virtual currency has attracted analysts and billionaires because of its state-of-art innovation and legit features.