TL; DR spoiled
- Bitmain stops supplying its bitcoin miners to mainland China. It does this in accordance with local government regulations.
- Bitmain says its decision does not affect its maritime trade. But this could be the beginning of the country’s exit from China.
Bitmain, a leading maker of bitcoin mining hardware (BTC), will cut shipments from mainland China on Monday. The company said in a statement issued in Beijing on Sunday.
The company says its decision was made out of need to comply with government regulations. Nevertheless, it continues to serve the usual maritime markets.
This decision will not come as a surprise to many in the crypto industry. At present, China is pursuing restrictive policies targeting this sector. And Bitcoin’s decision reflects the casualties of China’s anti-cryptographic stance in operations in the region.
Bitmain is having trouble inside the country. Its profitability has been declining since 2017. At that time, the domestic market accounted for up to 50% of its profits. This figure dropped to 40% in 2018.
Is Bitmain ready to leave Beijing?
Analysts believe the decision will have little effect on the company’s profits. But what is clear is that it can determine its exit from China.
The decision has provoked mixed reactions on Reddit. Redditors like danielrayson think this decision will destroy BTC. But another user, BKCrypt01, feels it creates a win for everyone. Redditor insists that Bitmain can focus on providing services to other crypto-friendly areas.
North America is one of the regions that benefits from development. It has emerged as an alternative investment destination since China intensified its crackdown on cryptocurrencies. In addition to having less restrictive laws, the area has abundant sources of clean and affordable electricity.
This is an opportunity that Bitmain has not been slow to seize. Last month, the company contracted with 56,000 BTC miners to supply ISW Holdings (BlockQuarry) to the Georgia mine concern. The latter expects to generate more than $ 10 million in monthly revenue by October next year.
China’s cryptographic space is shrinking
The crackdown on China’s digital currencies has been going on for some time. This says there are two main reasons for its stance. First, it considers cryptocurrencies to be speculative and therefore detrimental to its economy. Second, the need for ballooning force in this sector puts pressure on its current capacity.
Therefore, this country has issued decrees that have gradually reduced the freedoms in this space. Its latest attempt has been to put cryptographic mining on its 2021 list for negative market access.
The list includes parts of the Chinese economy that the government has banned from investing in. This is a decision that effectively sounds the death knell in the extraction of cryptography in the country.
As a result, many companies have decided to relocate their operations. Singapore and Hong Kong are among the crypto-supporting regions to which they have migrated.
The cryptocurrencies of Binance and Houbi are pushing at least 20 other companies to relocate their operations. Other include Spark Pool, Atrium Superior Mining Pool, and Powercrypto Holdings. And now Bitmain has joined them.
China’s cryptography industry is struggling
Bitmain can be reassured because it does not prohibit the production of mining hardware. This means that they can still produce them but not for domestic use. It is not yet clear where Beijing will direct its next cryptographic attack.
Even with increasing restrictions, cryptocurrency enthusiasts have found a way to keep their investment alive. Today mining is private and on a small scale. They use GPUs that are very portable. In addition, they use virtual private networks (VPNs) to disguise users’ identities.
Founded in 2013, Bitmain is a multinational semiconductor firm. Although it is currently headquartered in Beijing, reports indicate that it will be relocated to Shenzhen. It produces solutions for Blockchain and AI applications.