China declares new crackdown on crypto as income for North American bitcoin miners hits record highs

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The Chinese government has continued to warn against trading and investing in cryptocurrencies as part of its nationwide crackdown. A central bank official in the country reiterated that Bitcoin and other digital assets are not legal tender and have “no value.” Since the ban on crypto mining in China, Bitcoin miners in North America have enjoyed increased market share.

A Chinese central bank official reiterated the risks cryptocurrencies pose to its citizens and warned the public to stay away from the digital asset market to protect their capital. While China’s crackdown on cryptocurrency mining has driven prices down, it has also opened up opportunities for the industry to grow in other jurisdictions.

China strives to ensure crypto-related operations stop

As part of the Chinese government’s plan to phase out the use of cryptocurrencies in the country, the deputy director of the Financial Consumer Rights Protection Bureau of the People’s Bank of China (PBoC), Yin Youping, said that the new asset class is nothing more than an investment. speculations. He further cautioned the public to stay away from any transaction related to digital assets.

Yin reminded citizens that cryptocurrencies such as Bitcoin are not legal tender and have “no real value.” He said investors should protect their capital by staying away from digital assets and increasing their awareness of the risks associated with the new asset class.

China’s central bank has taken further steps to ensure that digital asset trading operations stop. The PBoC is also working with other regulators to crack down on foreign exchanges, trading websites, apps and corporate channels in the country.

Yin added that the next step for the central bank would be to establish a standardized working mechanism to increase pressure on illegal crypto operations and continue to crack down on digital asset transactions in the country.

Local municipalities, including Yingjiang County, have also taken steps to end crypto-related activities. County regulators have asked hydropower plants to cut power to Bitcoin miners in the region. The move follows the ousting of a large number of miners from their operations in May, which caused prices to drop as miners rushed to sell their digital assets.

As a result, miners outside of China have had the opportunity to grow. North American mining companies have seen an increase in demand for facility hosting space as they begin to occupy more of the Bitcoin network hashrate as Chinese miners increasingly go offline.

According to Bitfarms CEO Emiliano Grodzki, since the ban on cryptocurrency mining in China, 50% of the network hash rate has been shut down, allowing his company to increase its market share by 1% since. the start of 2021 to more than 1.5% in the second quarter.

Riot Blockchain also saw a 35% QoQ mining revenue increase to a record high of $ 31.5 million in the second quarter.

As active miners declined in China, the global hashrate also followed, which positively impacted the number of blocks companies could win, according to Fred Theil, CEO of Marathon Digital Holdings. The company also saw a revenue increase of 220% in the second quarter compared to the previous quarter.

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