Cryptocurrency mining operators, including the Huobi Mall and BTC.TOP, are suspending their operations in China after Beijing intensified its efforts to crack down on mining and trading in Bitcoin, while sending digital currency.
A State Council committee headed by Deputy Prime Minister Liu. He announced the efforts Friday afternoon – the first time the council has addressed virtual currency mining, a big business in China that accounts for up to 70 percent of the world’s cryptocurrency supply.
Cryptographic miners use increasingly powerful and specially designed computer equipment to verify virtual currency transactions in a process that produces newly minted cryptocurrencies such as Bitcoin.
Bitcoin took a hit after the last Chinese move and is now down nearly 50 percent from its all-time high. It fell to 17 percent on Sunday, before matching some losses and traded for the last time in Asia.
Investor protection and the prevention of money laundering are particular concerns of governments and financial regulators who are wondering whether and how the cryptocurrency industry should be regulated.
U.S. Federal Reserve Chairman Jerome Powell sparked the heat of cryptocurrencies last week, saying Thursday they pose risks to financial stability and indicated greater regulation could be warranted.
A change abroad
Huobi Mall, which is part of the Huobi cryptocurrency exchange, said in a statement Sunday afternoon that all of its custody businesses have been suspended.
“Meanwhile, we are contacting overseas service providers to pave the way for mining platform exports in the future,” Huobi Mall said through its official Telegram community and asked customers “not to worry and calm down “.
BTC.TOP, a cryptocurrency mining group, also announced the suspension of its business in China, citing regulatory risks.
Founder Jiang Zhuoer said in a microblog message through Weibo that in the future, BTC.TOP will mainly conduct cryptographic mining business in North America.
“In the long run, almost all Chinese cryptographic mining platforms will be sold abroad, as Chinese regulators repress mining at home,” he wrote.
China has already lost its position as a global cryptocurrency trading center after Beijing banned cryptocurrencies in 2017.
“Eventually, China will also lose the computing power of cryptography to foreign markets,” said Jiang, who predicted the rise of U.S. and European mining pools.
HashCow, another cryptocurrency that owns ten mining sites in China’s provinces, including Xinjiang and Sichuan, and sells computing energy to investors, said it will fully comply with government regulations.
In a statement to customers, HashCow said it will suspend the purchase of new Bitcoin platforms and promised a full refund to investors who had placed orders for computer power but had not yet started to exploit.
Aside from the large-scale fall in virtual currencies last week: the Bloomberg galaxy’s cryptocurrency index fell nearly 40 percent, the highest since the pandemic turbulence of March last year.
Still, RBC derivatives strategist Amy Wu Silverman argued Sunday in a note that, based on a measure of risk-adjusted returns known as the Sharpe ratio, Bitcoin has outperformed shares of Tesla Inc. , SPDR S&P 500 ETF Trust or trusted Invesco QQQ Series 1.
Bitcoin, Ether and meme virtual currencies like Dogecoin continue to make significant gains over longer periods of time, like last year, by about 12,000% in the case of Dogecoin.
For Ben Emons, CEO of global macro strategy at Medley Global Advisors in New York, Bitcoin is “consolidating control of markets through volatility, liquidity and correlation.”