After banning cryptocurrencies nationwide, Chinese authorities through the People’s Bank of China reiterated the message to China’s financial system giants in a meeting. A BPC official said banks and other financial institutions should not allow account opening or registration for cryptocurrency-related activities.
The Agricultural Bank of China was the first to follow the instructions of the Chinese financial authorities. The country’s third-largest bank has said it will immediately close all accounts of clients involved in cryptocurrency trading activities.
This decision would have serious consequences on the price of Bitcoin and other cryptocurrencies that were already in a bearish impasse. As of this writing, the cryptocurrency market is down 6.32%. Bitcoin is bought at $ 32,685, down 19.63% in 7 days. The price of Ethereum is at $ 1980 representing a decrease of 22.86%. Dogecoin, XRP, Cardano (ADA) are down 32.39%, 24.47% and 18.17% respectively.
Bitcoin Hashrate to Lows
First, Hashrate is a piece of mining jargon that is used to measure the mining power of one or more machines. In other words, it is the speed through which the machine solves calculation operations. CoinTelegraph reported that results for the Bitcoin Hashrate network plunged 46%. Bitinfocharts also reported that the Bitcoin Hashrate dropped 171.4 Exahashes per second to 91.2 EH / S after 6 weeks.
According to the same Bitinfocharts report, the profitability of mining has also declined. It fell 98.67%. Going from $ 0.449 per terahach to $ 0.226. The firm hand of the Chinese authorities against all cryptocurrency activities, mainly Bitcoin mining, is the cause of these poor results.
The miners have already found a new destination: Texas. They would have flashed for the American state for its flexibility in terms of regulation and the relatively affordable cost of renewable energies.
During the Bitcoin summit in Miami, the city’s mayor invited miners, driven to China, to come and settle in his city to continue with the mining activity. El Salvador has also been very supportive of Bitcoin mining.
What should we remember from the censorship position of the Chinese authorities?
The Chinese authorities have advanced the climate argument to justify the ban of cryptocurrencies in their territory. They indicated that their stance on cryptocurrencies is not new as these measures have been around since Bitcoin’s first bull in 2017. Nonetheless, why did the Chinese Communist Party wait until 2021 to reiterate its anti-Bitcoin measures.
It’s no secret that the regime still wants to have control over everything that happens in their territory. The anonymity and decentralization that cryptocurrencies offer undermines the Communist Party’s oversight function. Let’s not forget that China is keen to promote its digital currency.