Bitcoin is struggling around $35K as the Chinese crackdown on Bitcoin mining operation spreads to the province of Sichuan, a hydropower-rich province in South-West China.
On last Tuesday, June 15th, the world’s largest crypto asset by market cap was changing hands above $41,000 levels after some encouraging news from Tesla and the upcoming Taproot update. But China’s regulatory fairs again pulled the coin back to below $40,000.
As Wealth Growth Insights reported, last Wednesday, June 16th, China’s largest exchange Huobi restricted the leverage of existing users to less than 5x, which was 125x before. The reason for the move was due to concerns about regulatory policies. On that same day, Bitcoin’s price fell back to around $38,000.
Another below to Bitcoin price from China came on Friday, June 18th, when the news came that authorities extended their crackdown on Bitcoin mining operation to the province of Sichuan.
According to the reports, the Sichuan Provincial Development and Reform Commission, and the Sichuan Energy Bureau issued a joint notice demanding the closure of 26 suspected cryptocurrency mining projects by Sunday, June 20th.
Sichuan was a location of last resort due to its extensive network of dams for mining operations pushed out of provinces that rely on coal-fired power plants for electricity. Other regional mining centers including Xinjiang, Inner Mongolia, and Yunnan have also ordered crackdowns on Bitcoin mining.
Most of the mining operations in Yunnan and Sichuan are powered by hydropower. The recent crackdown shows that concerns are not about the environmental impact of Bitcoin, China just wants to wipe out the cryptocurrency from the country.
The move has damaged the coin’s price significantly as the Bitcoin started to slide from around $39,000 on June 17th to the last 24-hours low of $33,432 on Sunday, reveals data compiled by CoinMarketCap. BTC price is $34,250 at the of writing.
The closure of 26 large Bitcoin mining facilities has effects far beyond the price plunge. According to Wu Blockchain, due to the crackdown on Bitcoin mining in Sichuan, the 24-hour average hash rate fell below 100E on June 20. The BTC hashrate of the top-five Chinese mining pools has corrected by nearly 25%. With that, American mining companies are seeing a huge increase in their hashrate as Foundry USA mining pool makes made its way to the top ten spots and has become the seventh-biggest crypto mining pool.
In the last 24 hours, Foundry USA 🇺🇸 is the only major #Bitcoin mining pool that's increased in hashrate. pic.twitter.com/WLbE7hA4Ml
— Documenting ₿itcoin 📄 (@DocumentingBTC) June 19, 2021
Furthermore, the Bitcoin block times had shot to more than one hour on Sunday. Wu Blockchain, on Sunday, June 20, wrote:
“After most big mining farms were shut down in Sichuan, the Bitcoin network once again had a block time of more than 1 hour last night. On June 12, there was a block production time of nearly 2 hours.”
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