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Bitcoin Migration To North America

Bitcoin (BTC) mining power is beginning to shift to the United States amid a heavy crackdown on the sector in China.

China Bitcoin crackdown

Bitcoin Migration To North America. In recent months, the Chinese government has put the spotlight on cryptocurrency-related activities. The State considers that bitcoin and cryptocurrencies, in general, encourage the proliferation of illegal operations. Thus, the country’s police recently arrested over 1,000 people for money laundering with cryptocurrencies. 

However, it is not only fraudulent operations that have caught the attention of the authorities. Other crypto-asset-related activities, such as mining, have also been heavily restricted. There were currently five provinces in which the State banned cryptocurrency mining.

China forbids banks from transacting Bitcoin.

The People’s Bank of China asked various banking institutions to stop providing virtual currency transactions and identify customers who operate with Bitcoin or other cryptocurrencies. 

At that meeting, it was evident in the new regulations that all banks and payment institutions must implement the “Notice on Bitcoin Risk Prevention” and the “Notice on the Prevention of Token Issue Financing Risks,” among other regulatory commitments. Thus, these institutions must comply with customer identification and “must not provide account opening and registration for activities related to products or services such as trading, clearing, and settlement” of digital assets. 

Also, the statement issued by the People’s Bank of China states that “institutions should thoroughly investigate and identify virtual currency exchanges and over-the-counter traders’ capital accounts, and cut off the payment link of transaction funds promptly.” In addition, these entities must analyze transaction characteristics, improve abnormal transaction monitoring models, and ensure better identification of those who trade with them. 

The ban document

The document explains that China’s government agencies consider that activities linked to virtual currencies “alter the normal economic and financial order” of the country. According to the statement, cryptocurrencies and other digital assets generate risks of illegal international transfers of assets, money laundering, and other illegal and criminal activities. 

The meeting, disclosed by the People’s Bank of China itself, was intended to “thoroughly implement the relevant considerations and deployments of the Central Committee and the State Council (of China), […] fight Bitcoin speculation and other virtual currency transactions, protect the security of people’s property, and maintain financial security and stability.” 

The entities that joined the event were the Agricultural Bank of China, the Industrial and Commercial Bank of China, the Construction Bank, the Postal Savings Bank, the Industrial Bank, and Alipay (China) Network Technology. According to the People’s Bank of China, they agreed to cooperate with what was requested and assured that they would multiply their efforts to fight malpractices in this sector.

 

Bitcoin migration to North America

Bitcoin (BTC) mining power is starting to shift to the United States amid a heavy crackdown on the sector in China. A report shared by outlets such as CoinDesk aligns with recent speculation that cryptocurrency miners in China are looking to migrate to the U.S. due to the energy crackdown the Asian country government is taking on the crypto industry domestically. 

CNBC representative Eunice Yoon reported Monday that a Chinese logistics company in Guangzhou, northwest of Hong Kong, has confirmed that it will transport three tons of Bitcoin mining machines to Maryland, U.S. The correspondent and host of the Inside China network shared the information via her Twitter feed. Compass Mining firm commercial director Thomas Heller claimed that the three tons of equipment represent “about 200 units of S19.” Heller refers to the Antminer S19, a mining rig manufactured by Bitmain, capable of mining Bitcoin (BTC) and Bitcoin Cash (BCH) and weighing about 15.2 kg. 

Although the weight may seem significant in Eunice Yoon’s view, Fenghua’s shipment represents a minimal load. “3000 kg sounds huge, but compared to the number of miners that are regularly shipped, it’s just a small batch,” the correspondent said. 

The news comes just as multiple reports emerge about the Chinese government’s intensifying crackdown on cryptocurrency trading and mining. The People’s Bank of China, PBoC, urged institutions to cut off payment channels for cryptocurrency trading quickly, as stated above. 

China prohibitive measures

Meanwhile, several provinces across the country are taking on prohibitive measures around cryptocurrency mining amid the rollout of a government plan to reduce carbon emissions. For example, the local government in Changji ordered a complete shutdown of Bitcoin mining activities in recent weeks. And something similar has been done by Inner Mongolia and Qinghai province.

China accounts for more than 65% of the world’s mining power, so the new policies could pose a significant risk to the Bitcoin network. In addition, the closure of mining operations reduces the hash power or “hash rate,” the measurement unit of the Bitcoin network’s processing power. 

In this regard, Heller estimated that at least 50 Exahash per second of mining capacity in China had been shut down recently, or the equivalent of 526,000 S19 machines. (One EH equals one million TH or one quintillion Hashes). That represents about 80,000 metric tons of potentially idle machinery. 

“That’s if they were just S19s. But there are also countless S9s and older generation units, so the total number of kg would be much higher,” Heller added. Meanwhile, while some interpret China’s banning measures as a direct attack on Bitcoin, others think this move could favor the major cryptocurrency. 

David Marcus, the co-creator and board member of Facebook’s cryptocurrency project, called China’s crackdown on Bitcoin and the industry’s migration to the U.S. a “great development” for the flagship coin. 

It is worth recalling that a warning from China on crypto trading and mining sent prices plummeting in May. The market is experiencing similar price movements, with Bitcoin (BTC) registering important losses.

 

Bitfarms: Canadian Bitcoin mining company debuts on Nasdaq

Canadian Bitcoin mining company Bitfarms began trading this Monday, June 21, on Nasdaq, the second-largest stock exchange in the United States. The firm, powered almost entirely by renewable energy, debuted under BITF. The shares opened with a price of $4.27 each but went down, trading at least 6.22% below the initial price. 

The company’s founder, Emiliano Grodzki, talked about the Nasdaq debut as an achievement for a company focused on its development. For the past four years, Bitfarms has been working with an apparent belief that mass adoption of Bitcoin is possible, as well as progress in digital mining.

Bitfarms is the largest publicly traded bitcoin miner in North America, using over 99% hydroelectric renewable electricity. They are industry leaders in setting the highest standards for ourselves and our mining operations and in being listed on one of the most prestigious stock exchanges in the world.

Emiliano Grodzki, founder and CEO of Bitfarms

With its Nasdaq debut, Bitfarms joins a small group of U.S.-listed Bitcoin mining companies, such as Marathon Digital Holdings, Riot Blockchain, and Canaan Inc.

 

Bitcoin mining with renewable energy

Bitfarms highlights that it has a diversified production platform with five industrial-scale facilities located in Quebec. 100% environmentally friendly energy powers each facility. Bitfarms mined 1,000 bitcoins with hydroelectric power so far this year. The firm has mined about 1% of the bitcoins in circulation. They extract about 8 BTC per day for $9,500 each. 

On the other hand, Bitfarms was one of the first cryptocurrency miners to start trading on Canada’s TSX Venture Exchange in July 2019. Bitfarm shares jumped more than 1,033 percent last year on the TSXV while gaining more than 111 percent this year. However, before its Nasdaq debut, TSXV-listed Bitfarms shares fell about 2 percent to close at C$5.28 on Friday, June 18.

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