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China declares further crackdown on crypto, while North American Bitcoin miner earnings reach record highs

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  • The Chinese government has continued to warn against trading and investing in cryptocurrencies as part of its nationwide crackdown.
  • An official from the country’s central bank restated that Bitcoin and other digital assets are not legal tender and have “no value.”
  • Since the ban of crypto mining in China, Bitcoin miners in North America have benefitted from an increased market share. 

An official from the Chinese central bank has reiterated the risks that cryptocurrencies pose to its citizens and has warned the public to stay away from the digital asset market to protect their capital. While China’s crackdown on crypto mining brought prices down, it also opened up opportunities for the sector’s growth in other jurisdictions. 

China working to ensure crypto-related operations are halted

As part of the Chinese government’s plan to eliminate the use of cryptocurrencies in the country, the deputy director of the Financial Consumer Rights Protection Bureau of the People’s Bank of China (PBoC), Yin Youping, said the new asset class is nothing more than investment speculations. He further warned the public to stay away from any digital asset-related transactions.

Yin reminded citizens that cryptocurrencies such as Bitcoin are not legal tender and have “no actual value.” He stated that investors should protect their capital by staying away from digital assets and increasing their awareness of the risks involved with the new asset class. 

The Chinese central bank has been taking new measures to ensure that digital asset trading operations are ceased. The PBoC is also working with other regulators to crack down on overseas exchanges, trading websites, applications and corporate channels in the country.

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Yin added that the next step for the central bank would be establishing a normalized working mechanism to ramp up the pressure on illegal crypto operations and continuing to crack down on digital asset transactions in the country. 

Local municipalities, including Yingjiang County, have also taken measures to halt crypto-related activities. Regulators from the county requested hydropower plants to cut the power supply for Bitcoin miners in the area. This move follows a large number of miners being squeezed out of their operations in May, which caused prices to crash when miners were rushing to sell their digital assets.

As a result, miners outside of China were given the opportunity for growth. North American mining companies have seen a surge in demand for facility hosting space as they began to take up a larger portion of the Bitcoin network hashrate as Chinese miners increasingly went offline.

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According to Bitfarms CEO Emiliano Grodzki, since the cryptocurrency mining ban in China, 50% of the network hash rate was shut down, allowing his firm to increase its market share from 1% since the beginning of 2021 to above 1.5% in Q2. 

Riot Blockchain also witnessed increased mining revenue by 35% QoQ to a record high of $31.5 million in Q2. 

Since active miners have decreased in China, the global hashrate also followed, positively impacting the number of blocks firms could win, according to Marathon Digital Holdings CEO Fred Theil. The company also recorded a revenue bump of 220% in Q2 compared to the previous quarter. 

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Bitcoin Drops as China Declares Crypto-Businesses Illegal

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  • China declared that cryptocurrency-related businesses are illegal
  • Bitcoin, Ether, and stablecoin Tether do not qualify as legal tender in China
  • BTC drops in price as the announcement went out

Once again, China reiterated its antagonistic stance on Bitcoin and the cryptocurrency industry as a whole.

In an announcement, the People’s Bank of China (PBOC) mentioned that BTC, ETH, and USDT are not legal tenders in China. They added that these cannot be used in the currency market.

Additionally, the central bank deemed all crypto-related businesses as illegal. This includes overseas exchanges serving residents within China and derivative transactions.

Following the news, Bitcoin’s price fell by almost $2,000 as the news circulated. This has been a common pattern whenever China FUD comes out.

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Earlier, China also reiterated its stance on crypto trading and mining while testing the Digital Yuan. According to the PBOC, it will continue releasing regulatory pressure over the crypto trading industry.

Despite the negative news, many analysts remain bullish on Bitcoin and the cryptocurrency industry as a whole. According to analyst Lark Davis, this is not new and will happen again in the future.

In a tweet, Davis mentioned that “The year is 2025, #bitcoin has just corrected from 400k to 250k on China banning BTC fears.”

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Can Bitcoin Surpass $6,000,000? Ethereum and Polkadot Creator Details Possible Future of Crypto

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Early Bitcoin developer and co-founder of Ethereum and Polkadot, Gavin Andresen, is outlining a future where BTC rises to a staggering $6,000,000 per coin.

Gavin Andresen, who took over as Bitcoin’s lead maintainer from founder Satoshi Nakamoto in 2011, just published a new blog post detailing how BTC’s theoretical evolution could look.

Andresen describes a “possible” scenario where Bitcoin hits a price tag of $6,000,000 by 2061, transaction fees 326x higher than they are now, and the blockchain is used chiefly by whales.

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“Imagine: it is the year 2061. The BTC price is six million US dollars – equal to about a million 2021 dollars because of inflation.

Miners are being rewarded 0.006103515625 BTC per block, plus transaction fees of about 5 BTC for 4,000 or so transactions ($7,500 per transaction).

But most BTC transactions don’t happen on the BTC network. Most BTC is locked up in multi-signature outputs secured using multiparty computation and mirrored on another chain as ‘wrapped’ tokens.”

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In his scifi scenario, Andresen says those who do remain on Bitcoin’s network will be incentivized to keep it alive.

“The transactions that do occur on the main BTC network are high-value, mostly between super-whale-size holders…

These whales maintain the BTC network forever. They are the miners and the transaction creators; they don’t care how high transaction fees go, because they receive as many fees as they pay.”

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However, Andresen says that by 2100, even those users would likely leave the blockchain.

“In the year 2100 the whales notice that the mining reward is basically zero… Eventually, there are zero new BTC being produced on the BTC network, and zero BTC circulating on the BTC network. There is nothing left to secure, and the chain stops.”

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

Crypto trader Michaël van de Poppe is looking at what’s ahead for Bitcoin (BTC) and the smart contract platform Cardano (ADA).

The analyst tells his 420,000 Twitter followers that the best entry point for Cardano may be gone after the asset bounced off a key support level at $1.86.

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“If you want to get into Cardano, this was the region where you would want to get into it, and the higher low that might be created.

So based on the daily timeframe, the best entry might be gone, but you’re still getting a better entry than the ones who have been buying around $2.80.”

Van de Poppe is now looking to see if ADA can turn resistance at the $2.37 level into support.

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If the markets correct further, he is keeping an eye on the $2.15 level as a potential buy zone.

“When you’re looking at the four-hour time frame, I think you’re getting the exact same view as what you have right now on Bitcoin and [Ethereum], actually. So you’re going to look for an entry point which is around the fact of $2.15, so anything in this region might be a good entry point if we get a corrective move.”

Looking at the Bitcoin pair, van de Poppe thinks that ADA will most likely consolidate briefly after retesting support at its previous all-time high.

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“We can see that we’ve had a beautiful retest of the previous high here too, and therefore some consolidation is most likely going to take place before we’re going to have new impulse waves.

So both the USDT and BTC pair are looking for continuation, and I think that’s just great, and I think that’s just what we want to see with the markets right now.”

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