Bitcoin Falls 7% Following Stricter Mining Regulations in China

The world’s largest cryptocurrency, Bitcoin, dropped by 7% to $32,801, falling below $33,000 for the first time since June 8. According to CNBC, citing Coin Metrics, other major cryptocurrencies also saw declines: Ethereum fell by 8% and Ripple by 7%.

The decline began after five Chinese provinces banned mining operations on June 20 as part of the country’s ongoing efforts to tighten regulations on cryptocurrency mining. This move follows a statement from Chinese Vice Premier Liu He on May 21, calling for stricter oversight of mining and crypto trading, although no specific measures were announced at that time.

China’s Regulatory Crackdown Intensifies

The latest bans highlight the determination of Chinese regulators to control speculative crypto trading and manage financial risks, despite some economic benefits for local regions. According to the state-backed Global Times, more than 90% of China’s Bitcoin mining centers are expected to shut down as a result of these measures.

Impact on the Global Crypto Market

Experts predict that the migration of miners out of China will likely lead to a sell-off of cryptocurrency reserves in the near future. As of April 2020, Cambridge University estimated that about 65% of global Bitcoin mining took place in China.

Other Countries Welcome Displaced Miners

Authorities in other countries are already inviting miners to relocate their operations. For example, Miami Mayor Francis Suarez has offered miners access to inexpensive nuclear energy, while El Salvador’s President Nayib Bukele has proposed the use of geothermal power from “green” energy plants that the country plans to build specifically for crypto mining.