The recent crackdown of Chinese authorities on Bitcoin’s mining operations has sent shockwaves through the entire cryptocurrency sphere. As the country accounts for more than half of total cryptocurrency mining globally, the shocking reactions from the crypto market are quite natural.
The desire of Chinese policymakers to have control over digital coins is very much apparent from this new development coming out from the country. It isn’t the first time China has cracked the whip on Bitcoin, even as past antecedents revealed that after such reversals, the cryptocurrency market had come out stronger than before. Whether that happens, this time or not, is something cryptocurrency analysts and experts observe with great curiosity.
Just a couple of weeks back, authorities in China announced the crackdown on the Bitcoin mining operations, leading to a sharp decline in the value of the cryptocurrency. Along with announcing tough measures against miners, regulators also banned Financial Institutions and other agencies from dealing with individuals and organizations involved in cryptocurrency transactions. The massive impact of this particular news on the value of Bitcoin can be easily estimated from the fact that as this news came out, Bitcoin’s value came tumbling down, losing around $14k in the value.
According to the Global Times, local miners in the Sichuan province had been served with an order to stop their mining operations. The Energy Bureau of the province joined hands with Provincial Development and Reform Commission and ordered the electricity supply companies to cut off electricity supply to the firms involved in the mining operations. Not only Bitcoin but other digital currencies have also been impacted by the ban, including the second-largest cryptocurrency by market capitalization, the Ethereum. It is estimated that due to this clampdown, around 90% of the total mining capacity of Bitcoin in China has been impacted.