The US unseats China as world’s biggest bitcoin miner, accounting for a third of the global hash rate after Beijing’s crackdown

Bitcoin mining is viewed at BitFarms in Saint Hyacinthe, Quebe
Bitcoin mining rigs.

The US unseated China as the world’s biggest bitcoin miner, accounting for a third of the global hash rate, after Beijing banned all cryptocurrency transactions, data from a new report showed.

The US share of the global rate has more than doubled to 35.4% from 17% in April, according to a report from the Cambridge Center for Alternative Finance published on Wednesday. China’s global hash rate, meanwhile, plunged to zero from 44% in that time.

Hash rate is a key measure of how much computing power is required to support the network and to create bitcoin. It is also important to the bitcoin security protocol that prevents any double-spending of bitcoin.

The increase in the US hash-rate share came after China in September banned all cryptocurrency transactions. The People’s Bank of China said virtual currencies “are not legal and should not and cannot be used as currency in the market.”

Leading up to the ban, Beijing had been steadily tightening the screws on cryptocurrency operators. China in June ordered bitcoin miners operating in the country to shut down, citing environmental concerns. Right after that, nearly half of the bitcoin network went dark as miners immediately looked to where to migrate.

The overall crackdown has eliminated China as a bitcoin superpower. In September 2019, the earliest data Cambridge collected, China accounted for as much as 75% of the global hash rate thanks to an abundance of coal and hydro plants that kept electricity prices low.

Meanwhile, bitcoin miners outside China see tremendous opportunities for growth, including those in the US. October data from Foundry USA, a digital currency group, showed 19.9% of bitcoin’s hash rate is in New York, 18.7% in Kentucky, 17.3% is in Georgia, and 14% in Texas, as first reported by CNBC.

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China banned all crypto transactions on Friday, but experts say the move was mostly priced in for bitcoin

A cryptocurrency electronic cash Bitcoin logo is seen on an Android mobile device with People's Republic of China flag in the background. (

China on Friday intensified its crackdown on digital assets by banning all cryptocurrency transactions, in what’s been seen as the country’s strongest restriction on the sector so far.

On Friday, the People’s Bank of China said in a statement that virtual currencies “are not legal and should not and cannot be used as currency in the market.”

They do not have the same legal standing as fiat currency, the central bank added, since they are issued by non-monetary authorities and use encryption technology.

The move came after the Asian superpower banned cryptocurrency mining and barred financial institutions from offering cryptocurrency services earlier this year.

The news sent bitcoin slipping to near $40,000 on Friday, a drop of around 6% in 24 hours, according to CoinDesk data.

Though crypto markets initially slumped, bitcoin’s price reaction was muted compared to previous clampdowns, mainly since the news was viewed as a confirmation of previous bans, Wes Fulford, CEO at investment advisor Viridi Funds, said.

“We are seeing the crypto markets down in price, however, the reaction is significantly smaller than previous bans as the market has already priced in the risk of China banning cryptocurrency transactions,” Fulford said in a note Friday.

By comparison, when China banned cryptocurrency mining over a weekend in June, bitcoin tumbled 11%. When it prohibited banks from conducting cryptocurrency transactions in May, the largest digital asset slid 7%.

Fulford said that bitcoin, in particular, showed resilience compared to other cryptocurrencies such as ether, which slid around 9% Friday as well as other major altcoins including ripple, solana, and dogecoin, which all fell.

While there was a substantial volume increase around the time of the news, only about 37% of the bitcoin-US dollar volume was traded in the two hours between 5 and 7 a.m. ET Friday, data from cryptocurrency exchange Bitstamp showed.

After which, prices recovered and volumes fell, Bitstamp said, indicating that the markets have largely processed the information.

“Interestingly however it is not looking like it will become a record day in terms of volume, not even in September,” Bitstamp said, adding that September 24 ended up to be the fourth-highest volume day of the month.

Memes even circulated on social media, mocking China’s move as just the latest in a string of similar moves dating back to 2013.

Bitcoin bull and Microstrategy CEO Michael Saylor took to Twitter to question the move as well.

“Nothing has created more wealth in the past decade than technologies banned in China.”

For Tim Frost, CEO of Yield App, a fintech app, the ban was expected. Anyone who was hoping for a reversal, he said, will just end up “disappointed.”

“China has made its intentions very very clear: Like all authoritarian regimes, it wants extremely tight control over all financial activity in the country, and it wants zero competition for its own central-bank digital currency,” he said via email Friday.

Compared to other nations, China is several years ahead in its efforts to develop a central bank digital currency. Around 60 central banks are developing or considering issuing digital currencies, according to the Bank for International Settlements, but none have advanced their plans as far as China has.

“Thankfully there is no shortage of countries and jurisdictions that are now embracing cryptocurrency,” Frost added. “So while the loss of the world’s most populous nation is a blow, most of the damage had been done some time ago.”

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Bitcoin may have to tumble to $25,000 before major investors really buy back in, says CEO of crypto unicorn Amber Group

Bitcoin symbol atm
Bitcoin has tumbled since April.

  • Bitcoin may have to drop to $25,000 before investors really start to buy the dip, Amber Group’s CEO said.
  • Michael Wu said institutions are still interested in crypto, but are wondering where the bottom is.
  • Bitcoin has fallen dramatically from its April record high, thanks in part to a Chinese crackdown.
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Bitcoin may have to fall as low as $25,000 before major investors start snapping up bitcoin in large quantities again, the chief executive of $1 billion crypto lender Amber Group has said.

Michael Wu told Insider in an interview this week he thought bitcoin has to fall further before institutions such as hedge funds are attracted to the asset again. He said he thought that level was probably between $25,000 and $30,000.

Bitcoin fell 5.5% on Thursday to $32,640. That was well below April’s record high of close to $65,000.

“If we really have a flush down to, say, $25,000, or even briefly below that, I think there’s tremendous interest waiting to buy very cheaply at those levels for long term entry,” Wu said.

Read more: A short seller who made 50% returns betting against MicroStrategy lays out his bear case thesis on crypto stocks – and shares an area of the market where he’s incredibly bullish

Bitcoin has tumbled since April, with selling driven by Elon Musk’s U-turn on accepting the token as payment for Tesla cars and a crackdown on crypto mining and transactions in China.

The breakneck rally in the first few months of the year was in large part driven by interest from big institutions like hedge funds and banks, analysts have said.

According to JPMorgan’s crypto expert Nikolaos Panigirtzoglou, institutional interest has all but dried up in recent months. He told Insider in June: “There is no evidence here of a buying-the-dip mentality.”

Wu, whose Amber Group recently gained the backing of major hedge funds and a $1 billion valuation, said institutions are not rushing into the crypto space “like they were doing last year, or the beginning of this year.”

But he said he still has plenty of conversations with institutional investors that are interested.

“I think most of them are still very confident and optimistic about the long term outlook of crypto assets. But in the near term, they are not sure [if we are] at the bottom or near the bottom,” he said.

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Crackdowns by regulators could pop the crypto bubble and mean bitcoin is unsuitable for professional investors, says UBS

China bitcoin mining crackdown Chinese flag cryptocurrencies
China is increasingly cracking down on bitcoin.

  • Crackdowns by regulators make bitcoin unsuitable for pro investors and could pop the bubble, UBS said.
  • The bank pointed to China clamping down on mining, and the growing concern over crypto in the UK and US.
  • It also said the common practice of trading crypto with leverage is likely to draw regulators’ attention.
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Regulatory crackdowns could pop bubble-like crypto markets and mean bitcoin is unsuitable for professional investors, Swiss banking giant UBS has warned its clients.

In a note sent out last week, UBS’ global wealth management team said China’s latest crackdown had hurt crypto prices and operators. It also said there were signs that tougher rules could be in the pipeline in Western markets such as the US and UK.

“Regulators have demonstrated they can and will crack down on crypto,” the note read. “So we suggest investors stay clear, and build their portfolio around less risky assets.”

It added: “We’ve long warned that shifting investor sentiment or regulatory crackdowns could pop bubble-like crypto markets.”

Read more: The top US portfolio manager at $2 trillion Amundi explains why bitcoin and ether won’t play a bigger role in the financial system in 10 years than they do now – and says a regulatory storm is coming for crypto

UBS’ warning to clients said a number of recent regulatory developments were a concern for cryptocurrencies.

China renewed its restrictions on the computing process known as cryptocurrency “mining” in June, with authorities in Sichuan province closing down numerous sites.

In the US, Boston Federal Reserve’s president Eric Rosengren said stablecoin Tether was one of the “financial stability challenges” it is watching. And the UK’s Financial Conduct Authority banned crypto exchange Binance from operating in the country.

UBS’s note added: “Crypto trading practices, such as extending 50X or 100X leverage, appear fundamentally at odds with mainstream finance regulation.”

The Swiss bank’s concern about cryptocurrencies is shared by many other lenders. Goldman Sachs analysts in May said bitcoin is “not a suitable investment” and listed concerns about its volatility and lack of cash flow.

However, Wall Street is divided on cryptocurrencies – as are banks themselves. Goldman Sachs, for example, relaunched its crypto trading desk this year to take advantage of the crypto boom, in spite of its reservations.

UBS said in its note: “While we can’t rule out future price gains in cryptos, we see this as a speculative market that poses significant risks to professional investors.”

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A key measure of the health of the bitcoin network has tumbled 50% from its peak in May following China’s crypto crackdown

bitcoin mining servers
Bitcoin mining computer servers are seen in Bitminer Factory in Florence

  • The hash rate of bitcoin has dropped 50% from its peak its May, according to data from The Block.
  • The hash rate is at the lowest level since May 2020, and has notched the largest drop in history.
  • On May 14, the hash rate fell from 180 EH/s to its current value of 90 EH/s.
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The hash rate of bitcoin has dropped 50% from its peak its May, falling to its lowest level in a year, according to data from The Block’s.

On May 14, the hash rate fell from 180 EH/s to its current value of 90 EH/s, according to The Block.

This decline – the largest in bitcoin’s history – bucked the long-term upward trend that has been historically seen.

The hash rate is a key measure of how much computing power is supporting the network. It is also important to the bitcoin security prtocol that prevents any double spending of bitcoin.

The dip can largely be attributed to China’s intensifying crackdown on bitcoin mining. The Asian superpower is currently the world’s largest bitcoin miner, accounting for over 65% of activity, according to data from the Cambridge Centre for Alternative Finance.

In the past, there has also been a high correlation between the hash rate and bitcoin’s price, which could signal further pain to come for the world’s largest cryptocurrency.

Bitcoin in recent days has been trading rangebound at just around half its April peak price of nearly $65,000. It was down by 3.76%, to $34,606 as of 9:06 a.m. ET.

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Mark Cuban defends bitcoin as the cryptocurrency crashes, arguing it’s a better store of value than gold

Mark Cuban
Dallas Mavericks owner Mark Cuban is a bitcoin bull.

Billionaire investor Mark Cuban has defended bitcoin’s reputation as a digital rival to gold, as the price of the biggest cryptocurrency is hammered by a crypto crackdown in China.

Cuban said on Twitter on Monday that bitcoin is “better than gold.” He added: “No worries about storing it. Easy to transfer. Easy to trade. Easy to convert. Doesn’t require an intermediary. Can be fractionalized.”

The Dallas Mavericks owner and “Shark Tank” star said that he thought the biggest challenge to bitcoin was that there are “no William Devane-type commercials and all the people who believe gold is an inflation hedge.”

Cuban was referencing commercials by precious-metals asset-management firm Rosland Capital, which featured the actor William Devane saying gold is “the only currency I trust.”

The comments from Cuban came as bitcoin tumbled more than 10% against the US dollar to a two-week low. It dropped after Chinese authorities renewed a crackdown on cryptocurrency “mining” – the energy-intensive computing process by which networks are secured and new coins are created. At the same time, China said it had met with major banks to reiterate its ban on crypto services,

Bitcoin traded at around $32,300 on Tuesday morning, down from above $40,000 a week earlier and around 50% lower than its April record high.

Cuban holds bitcoin, and so has an interest in talking up its merits. Yet he also appears to firmly believe it’s a superior alternative to gold, having argued that the digital currency’s scarcity means it can hold its value as inflation rises.

His view is controversial among investors, however, and it has been challenged by real-world events. Bitcoin’s plunge from a record level of $65,000 in April has coincided with US inflation shooting up to a 13-year high.

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Bitcoin tumbles 8% after China steps up crackdown on crypto mining, shutting down 26 key sites in Sichuan

China bitcoin mining crackdown Chinese flag cryptocurrencies
China is increasingly cracking down on bitcoin.

Bitcoin dropped 8% on Monday after Chinese authorities ramped up their crackdown on cryptocurrency “mining” over the weekend, with bodies in the Sichuan province ordering 26 of the biggest miners to halt operations.

The world’s biggest cryptocurrency fell to $32,950 as of 6.20 a.m. ET. Bitcoin was down around 49% from April’s record high of close to $65,000, but was still roughly 12% higher for the year.

Other cryptocurrencies also dropped sharply, with ether down around 6% and binance coin roughly 4% lower, according to Coinmarketcap. A broader market sell-off also appeared to be weighing on crypto, as investors moved towards safer assets.

The latest move by Chinese authorities to restrict bitcoin mining came in the southwestern Sichuan province over the weekend, when bitcoin miners were told to “clean up and terminate” their operations. Sichuan authorities said 26 bitcoin mining companies must be closed down on Sunday, according to a notice seen by the South China Morning Post.

Chinese state media outlet Global Times then reported that more than 90% of China’s bitcoin mining capacity was estimated to be closed down, at least for the short term, on Sunday.

Bitcoin mining – whereby computers solve complex puzzles to secure the network and mint new coins – has become a target in increasingly climate-conscious China because of the huge amounts of energy it uses.

Sichuan’s clampdown followed similar moves by authorities in Xinjiang, Yunnan and Qinghai.

“The dominant driver of bitcoin right now is the crackdown on mining & trading in China that began in May,” Michael Saylor, a leading bitcoin bull and chief executive of tech firm MicroStrategy, wrote on Twitter.

“This created a forced & rushed exodus of Chinese capital & mining from the bitcoin network,” Saylor said, describing this as “a tragedy for China and a benefit for the Rest of the World over the long term.”

Jeffrey Halley, senior market analyst at currency group Oanda, said the broader drop in risky assets following the Federal Reserve meeting was also weighing on bitcoin. Stocks have sold off after Fed officials on Wednesday moved forward their estimates of when the US central bank would have to raise interest rates.

“If, as I expect, the global buy-everything unwind continues this week, bitcoin will feel those chill winds as well,” Halley said.

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2 crypto pros break down why bitcoin in the clear for now after plunging 35% in a matter of days

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  • Insider spoke to two cryptocurrency professionals on why they’re still bullish towards bitcoin.
  • Bitcoin plunged 35% in a matter of days, then saw renewed selling pressure after China reiterated its bitcoin-mining clampdown.
  • The bitcoin bulls said the cryptocurrency will see range-bound trading in the short term.
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After taking a one-day breather following a week-long plunge that saw it lose more than 35%, bitcoin resume its sell-off on Friday after China reiterated its crackdown on bitcoin mining and trading.

Despite the quick succession of blows, two crypto professionals argue that the worst is over for bitcoin for now, despite renewed selling pressure.

“We believe that most of the leverage is out of the system now and bitcoin should start to form a base here,” Pankaj Balani, CEO at Delta Exchange, a crypto derivatives exchange, told Insider.

Balani did acknowledge that bitcoin’s recent travails have eroded investor confidence, meaning it will take time for the cryptocurrency to gain sustained upward momentum.

He also added that bitcoin’s price action until the end of May will be critical, although he does think the asset’s price has already bottomed out. Balani did note the $36,000 level as a support threshold, adding that a conclusive breach would signal a longer-term pullback.

To David Jones – chief market strategist at Capital.com, a crypto trading platform – corrections like this are normal. He cites bitcoin’s cult-like following as a reason why the cryptocurrency won’t stay downtrodden for long.

“So has the bitcoin bubble burst?” he said. “Don’t bet on it. Its devoted band of followers means that the crypto-grandaddy has a phoenix-like superpower to rise again.”

Further, in a video published on May 19, billionaire Mike Novogratz said bitcoin will consolidate for weeks, if not a couple of months – although he didn’t give a price range.

“We’re not going to put Humpty Dumpty back together again in a week,” said Novogratz. “But I want to stress loud and clear that the underlying progress that’s happening in both the bitcoin ecosystem … is full speed ahead.”

Read more: 7 crypto heavyweights told us what’s behind the sudden sell-off that erased over $400 billion from the market in just 24 hours – and whether now is the time to ‘buy the dip’

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Inner Mongolia doubles down on crypto-mining ban and sets up a hotline for the general public to report suspected activity

bitcoin mining servers
  • China’s Inner Mongolia Autonomous Region has set up a hotline for the general public to report any outlying cryptocurrency-mining operations that are still active in the region.
  • Its a move to further crack down on mining operations that could jeopardize China’s goal to reduce carbon emissions.
  • Inner Mongolia was once a hub for crypto-mining operations but has tried to fully clear them out of the region.
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The government in China’s Inner Mongolia Autonomous Region is cracking down further on cryptocurrency-mining operations.

The Inner Mongolia Autonomous Region Development and Reform Commission announced on Tuesday that it has set up a hotline, email, and mail address for the general public to report any outlying crypto-mining operations that are still active in the region.

The commission is also targeting mining companies that are posing as data centers and enjoying preferential policies in tax, land, and electricity prices, and any company that offers land rental services for crypto mining operations.

The creation of a hotline comes after the commission announced in March it was trying to fully clear out and shut down all virtual currency mining projects by the end of April 2021, per The Block.

According to Cointelegraph, Inner Mongolia was once a hub for cryptocurrency mining operations, and accounted for 7.71% of the global Bitcoin hash rate from September 2019 to April 2020.

Now, China has pledged to reduce carbon emissions, and Chinese authorities have cracked down on mining operations. China pledged in 2020 to reach carbon neutrality before 2060 and reach peak carbon emissions before 2030.

The announcement from Inner Mongolia comes as the cryptocurrency market experiences a steep sell-off. As of Wednesday afternoon, the global crypto market cap is $1.6 trillion, a 18.46% decrease over the last day, according to CoinMarketCap.

Read more: ‘Wolf of All Streets’ crypto trader Scott Melker breaks down his strategy for making money using ‘HODLing’ and 100X trade opportunities – and shares 5 under-the-radar tokens he thinks could explode

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