China’s strengthening of their Bitcoin ban has affected more than just the ability of their nationals to trade and mine cryptocurrency, it has also had many secondary effects upon the global market. With a strict ban on Bitcoin mining being enforced in China, other countries are beginning to take the place of China as a global mining power.
With China as the former global leader in cryptocurrency mining, crypto mining companies have been forced to either shut down entirely, or relocate to other countries. Some reports place the decrease in crypto mining from 75.5 to 46 percent, with the results of the decrease marking a significant opportunity for other countries to re-home the crypto mining rigs that are no longer allowed to operate in China.
The US has been the primary beneficiary of China’s crypto mining relocation efforts, with a number of large crypto mining companies such as Huobi Mall and BTC.TOP announcing they would be moving their mining rigs overseas. BTC.TOP stated at the time that they would be moving their rigs to the U.S:
“In the long term, nearly all of Chinese crypto mining rigs will be sold overseas, as Chinese regulators crack down on mining at home [...] Eventually, China will lose crypto computing power to foreign markets as well”
While the U.S has been the top choice for Chinese crypto mining companies, Kazakhstan is now the third place in global cryptocurrency production, soon to be second as China’s crypto mining output continues to decline.
In June of this year, Kazakhstan formally legalized cryptocurrency mining, as a way to diversify Kazakhstan’s economy and build their cryptocurrency sector. The government also introduced one of the lowest taxation rates of any country that allows crypto mining.
A number of Chinese crypto mining companies have selected Kazakhstan as a location to transfer their business to, investing in a country that they believe will continue to grow to be one of the top hubs for cryptocurrency in the future. BIT Mining Ltd is a crypto mining company that has invested in its future with neighbouring Kazakhstan, transferring 320 machines thus far, with a plan to transfer a further 2,600 pieces of equipment.
Another crypto mining company that believes in the future of crypto mining in Kazakhstan is Canaan - one of the largest manufacturers of ASIC Bitcoin mining equipment, which opened an overseas after-sales service center in the country, and plans to make use of the low-cost energy prices and crypto-friendly regulation in Kazakhstan.
China may be aplpying strict measures to enforce their Bitcoin ban in their nation, however the scope of the ban within their country is leading to industry players 'jumping ship' and moving their business to crypto-friendly countries. Crypto mining companies seem to have found a haven in neighbouring Kazakhstan, with investor support of this move marking a positive future for Kazakhstan.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.