Bitcoin Drops To $34,142 As Hashrate Declines With China Mining Crackdown
- ByStartupStory | June 21, 2021
Bitcoin dropped over the weekend because of Chinese mines’ closures and potential regulatory scrutiny. The largest cryptocurrency plunged by 5.5% for the fourth time in the past five sessions.The hash rate in China has been falling significantly as Bitcoin mines are being closed, Jonathan Cheesman, head of over-the-counter and institutional sales at crypto-derivatives exchange FTX wrote in an email. “The longer-term most see the hashrate moving out of China as positive but in the near term may have/has already resulted in inventory sales,” Cheesman said. Cryptocurrencies have been facing a lull recently. Bitcoin is trading at half of its record high of $65,000. As measured by CoinGecko, the market value of all cryptocurrencies is nearly about $1.45 trillion, last month it was $2.6 trillion.
However, one of the main reasons cited, China Clamping down on mining amid concerns about energy usage, and in the wake of deadly coal accidents. The city of Ya’an in the southwest region of Sichuan will remove all Bitcoin and Ether mining within one year as promised to the provincial authorities.According to a report in the Communist Party-backed Global Times, the closure of many Bitcoin mines in the province has resulted in more than 90% of China’s Bitcoin mining capacity being shuttered. As an estimate by the University of Cambridge about 65% of the World’s Bitcoin mining took place in China only.
In addition, Edward Moya, senior market analyst at Oanda Corp., said Bitcoin was being pressured by the sudden drop by the Titan token to nearly zero — a stablecoin that had drawn even billionaire Mark Cuban. Regulators had already been expressing concern about stablecoins, and Cuban himself encouraged further regulation of the space after the episode.
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