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Bitcoin tumbles as China escalates crypto mining crackdown

Bitcoin tumbles as China escalates crypto mining crackdown

The price of bitcoin tumbled Monday on fresh reports that China has expanded its crackdown on the mining of cryptocurrencies.

Bitcoin traded as much as 9 percent lower Monday morning before recovering slightly. It was last seen trading at about $32,300 per coin as of 7 a.m. ET, according to Coinbase data. It’s down over 17 percent from a week ago.

Other cryptos, including ether, cardano, XRP and dogecoin, were all also trading lower Monday.

The declines came after the government-backed newspaper Global Times reported that many bitcoin mines in the Sichuan Province and elsewhere were closed Sunday and would remain closed “at least for the short term.”

The paper estimated that more than 90 percent of China’s bitcoin mining capacity is currently shut down.

Mining is the energy-intensive process that both produces new bitcoins while also processing transactions made with the existing supply.

Bitcoin's value dropped following the temporary closure of Bitcoin mines in China.
Bitcoin’s value dropped following the closure of Bitcoin mines in China.
Coindesk

An unlikely alliance of various government bodies and even some crypto enthusiasts like Tesla CEO Elon Musk have criticized the bitcoin mining process for taking an outsized toll on the environment.

China has long hosted the majority of bitcoin mining operations in the world. But the recent Global Times report is just the latest signal that the Chinese government could be looking to limit or more closely regulate mining activity in the country.

Last month, authorities in China’s Inner Mongolia region and Yunnan Province announced similar limits on bitcoin mining in their areas. And top officials in Beijing last month called for a crackdown on the trading and mining of cryptocurrency, citing its impact on the environment and risk to individuals.

The World Bank appears to share some of China’s concerns. The international lender last week snubbed El Salvador, which became the first country in the world to embrace bitcoin as legal tender.

The World Bank rejected El Salvador’s request for help implementing the crypto, citing “environmental and transparency shortcomings.”

Tesla’s Musk has sought to find ways to limit the impact of bitcoin mining on the environment. He said last month that he met with Microstrategy CEO Michael Saylor and bitcoin miners in North America to discuss energy usage.

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Julia Mangels

Julia has handled various businesses throughout her career and has a deep domain knowledge. She founded Stock Market Pioneer in an attempt to bring the latest news to its readers. She is glued to the stock market most of the times and just loves being in touch with the developments in the business world.

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