Crypto Crackdown in China Intensifies but Failed to Kill BTC

Crypto Crackdown in China Intensifies but Failed to Kill BTC

The People’s Bank of China announced it would intensify its regulatory pressure on the crypto trading industry. It is due to the central bank’s belief that digital currency brings economic-financial risk.

However, an analyst gave some points that made China’s efforts as not effective. It includes Bitcoin’s hash rate recovery, stable peer-to-peer markets, and firm volume from Asia-based exchanges

In the previous months, the world’s largest cryptocurrency may have suffered a lot. However, its community of investors did not surrender to lift its prices.

One of the greatest risks it faced was when China banned Bitcoin mining after giving a two-week notice. It caused the single largest mining difficulty adaptation following the fall of the network hash rate to 50%.

Beforehand, BTC’s market sentiment was already tinted after Tesla CEO Elon Musk’s statement. He announced that the company would no longer accept crypto payments. He said it is mainly due to the environmental impact of the Bitcoin mining process.

Some analysts said that it remains unknown if Musk’s statement influenced China’s mining crackdown.

Last June 16, Chinese authorities blocked several crypto exchanges from web search results all over the country.

In addition, Huobi began to ban leverage trading and blocked new users coming from China.

Last June 21, its central bank mandated local financial institutions to shut down the accounts of over-the-counter desks.

According to an expert, it is a huge loss to the crypto community since the OTC desks are the fiat gateway in the country. He added that it would be tough to exchange Bitcoins for stablecoins without these desks.

Some analysts describe these well-planned, executed tactics as meaningless FUD. Yet, they did not deny that its short-term impact is a moderate success due to the collapse of BTC prices.

Hash Power Recovery

Based on recent data, Bitcoin’s hash power now recovered to 100 million TH/s in less than weeks. It is due to several China ousted miners who successfully transferred their equipment overseas, like Kazakhstan, Canada, and the United States.

As a flashback, last May 12, the Bitcoin network’s processing power peaked at 186 million TH/s. However, it started to plunge due to the Chinese mining crackdown.

For the first few weeks, mining hubs in coal-powered areas were ousted, and this was estimated to be at 25% mining capacity.

As the ban expanded to other regions, the indicator dropped to 85 million TH/s, which is its lowest level in two years.

Now, the hash rate continues to rebound as miners are starting to migrate overseas, where there is abundant and low-cost power.