China’s crackdown effects: The world’s largest manufacturer of bitcoin mining rigs is halting global spot sales of its machines. Bitcoin miners in China rush to leave the country.
Bitmain Technologies, the world’s largest manufacturer of bitcoin mining rigs, is halting global spot sales of its machines to aid the secondhand market for rigs in China, according to Bloomberg.
Today, Bitmain told the local mining community that the company’s decision is a product of the recent price plunges of new mining equipment. Since April, top-tier bitcoin mining rigs in China have been priced down by 75%, fueled by Chinese miners going offline after the country’s recent crackdown on bitcoin.
By halting sales, Bitmain claims it can help miners targeted by Chinese authorities to get better prices for their machines when exiting the industry. And in the long run, the mining rig maker giant could also benefit if the reduced supply ends up triggering a price increase for new rigs.
Last month, China’s state council stated that the country should act on a renewed crackdown on bitcoin mining and trading. Since then, local governments have been targeting bitcoin miners with shut down orders and inspection notices, a priori in fossil fuel-powered energy plants only.
China’s crackdown on bitcoin mining activities has compelled companies to reconsider their business strategies. BIT Mining, for instance, is now applying an „overseas deployment strategy.” The owner of the BTC.com pool has already delivered the first of three batches of mining equipment to Kazakhstan, where part of its operations will be housed going forward.
As many bitcoin miners in China rush to leave the country, the Bitcoin network hash rate is set to decline until they successfully get their machines online in overseas locations. Although the move of miners out of China was an ongoing trend, these abrupt shutdown orders have done some damage. In under 30 days, the Bitcoin network’s total hash rate has fallen by more than 40%.
However, a reduction of hash rate does not necessarily hurt the Bitcoin network’s security. For instance, Coin Metrics co-founder Nic Carter released a video explaining the likely effects of China’s bitcoin mining ban.
Source: Nasdaq
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