China intensified law enforcement against domestic Bitcoin mining activities. Bitcoin mining sites in Sichuan Province were reportedly massively blackout and lost their abilities for further mining operations, according to local media’s coverages.
BTC mining sites in Sichuan province were reportedly massively blackout since Sunday, citing local media’s coverages. Some firms even closed their facilities prior to the outage.
According to Global Times, The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice last Friday. As a result, local authorities requested a total halt to Bitcoin mining activities, ordering local electricity companies to “scree, clean up as well as terminate” mining operations without any further electricity supply by Sunday and conduct self-inspection by reporting their results by this Friday. In addition, 26 firms are listed and alleged as crypto mining entities, including Heishui Kedi Big Data Tech Co and Kangding Guorong Tech Co.
Over 90% BTC Mining Capacity Lost
The ban means more than 90% of China’s Bitcoin mining capacity is estimated to be shut down, at least for the short run. Local netizens described this incident as a collective “mining accident” or even “the end of an era”.
In southwestern China, Sichuan province is counted as the biggest Bitcoin mining hub in China or worldwide. Unlike thermal power generated in Inner Mongolia and Xijiang province, BTC mining activities in Sichuan mainly are generated by hydroelectricity instead, which is more environmentally friendly and sustainable, according to local data.
Shentu Qingchun, CEO of Shenzhen-based blockchain company BankLedger expressed his disappointment with the latest crackdown.
“We had hoped that Sichuan would be an exception during the clampdown as there is an electricity glut there in the rainy season. But Chinese regulators are now taking a uniform approach, which would overhaul and rein in the booming Bitcoin mining industry in China.”
Similar harsh ban actions in others key mining hubs in northern regions also took place recently. In addition, some areas in north-western China also have blackout due to natural disaster of flooding, affecting the hashrate of mining pools.
Some analysts believe China’s latest move intends to tighten regulatory scrutiny of digital currency trading and prevent systematic financial risk and prohibit money laundering such as these illegal activities. The market believes that China aims to promote its digital currency (e-CNY) against cryptocurrencies in the long term.
Meanwhile, Bitcoin price was trading down to $34,988 during the intraday, hit the low of $33,429 in the past 24 hours. Some analyst pointed out that the hashrate in China dropped significantly, encountering the death-cross, i.e. the 50-day moving average drops below the 200-day moving average, according to Bloomberg on Sunday.