It is more trouble for Bitcoin miners in China as yet another province orders a shutdown of all mining activities. This time around, it is the Province of Qinghai that joins the likes of Xinjiang and Inner Mongolia to issue a shutdown order to miners within the region.
In the past couple of weeks, Bitcoin has been under intense pressure as the most recent crackdown by the Chinese government added bearish momentum to the already falling prices. The original slump in prices was believed by many cryptocurrency users to have been initiated by the alleged controversial utterances by Tesla CEO Elon Musk.
While a series of pullback moments in the price of Bitcoin has coincided with comments by Musk, for many users, the strongest fundamental indicator that is causing the bear market is China’s decision to ban cryptocurrency activities.
The shutdown order in Qinghai was contained in a document that was released by the Information Technology Department of the province. According to the publication, the main reason for issuing the order falls in line with the concerns of the central government towards high energy-consuming industries.
Other reasons cited in the publication include the risk of environmental pollution, which has been a global concern for many years. Then also, in compliance with the State Council’s directive which focuses on the maintenance of financial stability by cracking down on cryptocurrency mining and trading activities within China.
The order in Qinghai is an all-rounder which restricts not just the perpetrators of mining activities, but also every individual or establishment that supports such activities either directly or indirectly.
Aspects of the order prohibit any local authorities from setting up new crypto mining projects while existing ones are ordered to close down. Even those who operate in disguise, in the form of supercomputers or data centers have also been warned to stop operations immediately.
In Qinghai, no company is permitted to provide venues, electricity, or other forms of supporting service to cryptocurrency miners. Any individual or corporation found to be involved in such activities will be made to face the law.
In enforcing this shutdown order, the Qinghai authorities have made known to the public that it shall be embarking on random inspection calls to select companies. Therefore, companies have been advised to be prepared for such inspection exercises by putting together related paperwork and support evidence, in case they are being questioned.
Also, the local authorities within the province have been given a June 20 ultimatum to give further updates on the implementation of the shutdown exercise. These updates shall be reported to the energy-saving department of the Qinghai provincial government.
China has been the hub of Bitcoin mining since the industry was created. Over two-thirds of the total Bitcoin hashrate has been domiciled in China. However, a government crackdown, especially in recent days, is seeing this dominance dwindle significantly. Going by what the government says, it is possible to not have any hashrate emanate from China in the future.
Cryptocurrency miners are relocating to other parts of the world, especially to Nordic regions where green energy is relatively cheap. Perhaps, we might see the Bitcoin hashrate which will be eventually lost in China recover from these regions. Then, the environmental pollution criticism of Bitcoin might become a thing of the past, a development that Bitcoin enthusiasts believe will do the industry a lot of good in the long run.