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Europe and U.S. may soon take the lead in Bitcoin mining, says major Chinese pool

The latest crackdown could push Chinese Bitcoin mining industry back to the state of 2014, an expert argued.

Europe and U.S. may soon take the lead in Bitcoin mining, says major Chinese pool
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Jiang Zhuoer, the operator of major Chinese mining pool Lebit Mining, argued that the latest crackdown on crypto in the country would likely lead to miners relocating their activity to Europe and the U.S., as pointed out by journalist Colin Wu.

โ€œThe worst case may be that large-scale mines are closed, and Chinaโ€™s Bitcoin mining [will return] back to the state of 2014-2015. Small miners put a few at home. Middle miners find a house to put dozens of machines for mining, large miners find a remote, small hydropower station,โ€ said Jiang.

He also noted that previously, constructing mining farms overseas was considered too expensive for local minersโ€”as costs could be ten times higher than in Chinaโ€”but many of them have changed their minds after this weekโ€™s statements from the government.

As CryptoSlate reported, Chinese authorities have published several โ€œanti-cryptoโ€ announcements earlier this week, leading to at least two major dips on the market on May 19 and 21.

First, three industry bodies under Chinaโ€™s central bank called for a ban on financial institutions and online payments channels that involve cryptocurrency. Then, the government cracked down on Bitcoin mining as well.

Mitigating social risks

According to Jiang, one of the main aims of the new policies is to protect retail investors from risks associated with crypto trading and mining.

“That is to say, individual mining is allowed, and you can bear profits and losses yourself, but financial capital is not allowed to intervene in mining, which will cause social risks due to losses,” Jiang explained.

In other words, Chinaโ€™s government wants to protect the general public from any losses that could result from investing in cryptocurrencies and mining. And while this is not a blanket ban on the industryโ€”at least for nowโ€”it can still result in the relocation of a significant portion of Bitcoin mining capacity to other countries.

โ€œMining in China may change from large to family miners, even if it causes 50% of the mining machines to fail to operate, there is no problem for the Bitcoin system. But the top mining pools may become European and American mining pools,โ€ Jiang concluded.

In his turn, MicroStrategy CEO Michael Saylor, who invested several billions of dollars in Bitcoin over the past few months, argued that China’s crackdown is actually very good for Bitcoin.

“A crackdown on miners in China would radically reduce the carbon footprint of Bitcoin mining, increase the profitability of all the remaining Bitcoin miners, reduce nagging China FUD, support progress toward our ESG goals, & drive up the value of BTC. We should be so lucky…” he argued.

But judging by the abundance of giant red “candles” on crypto price charts, the market seems to disagree with Saylor today.

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