Bitcoin Miners in China Will Move Operations to Other Countries in Wake of New Regulations
Thanks to China's recent decision to crack down on the world's biggest cryptocurrencies, some of the industry's most popular bitcoin miners are looking to move.
According to Bloomberg reports, Bitmain -- an organization responsible for two of China's largest bitcoin mining collectives -- will now open up more operations in the United States and Canada. Other mining co-ops are looking to those same countries as well as Europe in order to continue their mining operations.
“We chose Canada because of the relatively cheap cost, and the stability of the country and policies,” Jiang Zhuoer, founder of BTC.Top, said in an interview. He also considered locations in Iran and Russia.
Mining moves and shifts might not have a massive impact on the speed of bitcoin transactions. However, they would certainly reconfigure the current mining landscape. Miners once flooded China because of the country's relatively cheap electricity and even cheaper labor. However, as China and similar markets pull back, miners will be forced to rethink their locales.
China Continues to Close off Cryptocurrencies
This move underscores the increasingly closed-off nature of China toward bitcoin and other cryptocurrencies. The mood is a distinctive shift given the once progressive and accepting attitudes early in the cryptocurrency mining boom.
“This may have contributed to bitcoin coming off its daily highs,” said Craig Erlam, a senior market analyst at online trading firm Oanda in London, in an interview with Bloomberg. “Electricity usage certainly appears to be a significant challenge for the cryptocurrency in the years ahead.”
However, one of China's most popular bitcoin entrepreneurs and the man behind one of the country's longest-running trading operations still has considerable hope.
Bobby Lee is the CEO and founder of BTCC, a company that closed down its trading operations in China in September of last year. The decision came shortly after China banned initial coin offerings (ICOs).
"In this world, nothing is ever permanent," Lee said in an interview with CNBC's Squawk Box. "One day I think it's possible they'll lift the ban, so called, and they might reinstitute it and license it."
Lee's hope comes amidst fears that neighboring Asian countries would continue forward with their own versions of the ban. For example, many bitcoin mining companies are looking toward South Korea and awaiting the official word of them banning anonymous accounts in cryptocurrency transactions.
However, Lee also noted that bitcoin and the increasing difficulty surrounding mining new coins could see a continued rise in price for cryptocurrencies across the board.
"Today we're at only 1,800 of newly mined bitcoin of every day," he said. "That used to be 7,200 as recently as five years ago. So in just a few short, maybe two and a half more years, we'll see the supply go down again to only 900 bitcoins a day.
"So if you talk about multi-million dollars of inflow with only new supply of 900 bitcoins a day, you can imagine where prices could be at in three, five, or 10 years."
As of this writing, Bitcoin price currently sits at $16,711 USD.