Crypto Community Reacts to China Mining FUD, Will Bitcoin Price React Next?

Andrew Cummings
April 12, 2019

China's economic planning agency added "virtual currency mining activities" to the list of industries that face a ban in the country.

There are over 450 other activities that the NDRC thinks it should phase out, due to them not adhering to relevant laws, wasting resources, or causing pollution.

The commission has not proposed a target date or even put forward a plan for when it wants to eliminate Bitcoin mining which suggests that the practice should be phased out immediately. Cryptocurrency trading is illegal in the country; initial coin offerings, used to fund new blockchain projects, are banned; and Chinese banks can hardly touch the stuff.

China also began to limit cryptocurrency mining, forcing many firms - among them some of the world's largest - to find bases elsewhere. While cryptocurrency mining might require large amounts of electricity, Bitcoiners often argue it's not necessarily wasteful or polluting.

Bitmain declined to comment on the NDRC's proposal to ban bitcoin mining.

Yet the announcement hardly came as a shock to industry participants and watchers as it wasn't the first time Chinese authorities attempted to banish cryptocurrency and mining activities.

Over the past couple of years, China has been quite hostile towards Bitcoin and cryptocurrencies in general, at one point shutting down all cryptocurrency exchanges in the country, and undertaking or threatening numerous other measures to stifle cryptocurrency-related activities.

According to the Securities Times, a state-owned newspaper, noted on April 9, that the draft list noticeably mirrors the outlook of the China's industrial policy concerning the crypto sector. But if Bitcoin mining power spreads a bit more evenly around the globe, this threat would be diminished.

Certainly bitcoin mining does consume a good deal of power, and the new NDRC guidelines only follow a statement by Chinese officials in 2018 to disincentivize mining.

People familiar with the deals said that Hong Kong regulators had many questions about the companies' business models and prospects.

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