Bitcoin miners in China could seek new destinations

The CEO of the cryptocurrency and digital assets fund ARK36, Ulrik K. Lykke and the CEO of Crytohopper, Ruud Feltkamp, ​​agree that bitcoin miners will leave China due to bans, which have already caused a 30 % drop of the cryptoasset.

According to Ulrik, one of the events with the greatest influence on the value of bitcoin is the repression that the Chinese government exerts on cryptocurrency mining. However, he points out that “this is not the first time that Chinese policies have administered a shock to the markets and it is unlikely to be the last.”

The miners continue to produce, in the world, an average of 30 million dollars a day, which demonstrates the profitability of the industry. Therefore, for Lykke “t is reasonable to expect the miners to move elsewhere if uncertainty persists for Chinese operators. In fact, some reports suggest that this trend has already started.”

The displacement of mining, although in principle provoking a negative reaction, can become a very positive factor, because miners will probably find sites with safe access to other “cheaper, cleaner and renewable sources of energy and the hashrate will begin to recover and the network will be even more stable”, Lykke stressed.

The director of Cryptohopper, Ruud Feltkamp, ​​says that the refusal to mining in China will have a short-term effect for Bitcoin. People are reacting strongly “to China’s actions creating uncertainty, so this is likely to reflect negatively on the price of Bitcoin.”

For Feltkamp, ​​the fact that China is promoting its own cryptocurrency will create all the “incentives to have as little competition as possible”. He added: “I think we will see the miners leave China and relocate where there is spare or cheap energy. Fewer miners in one location also makes it more lucrative for the other miners.”

M. Rodríguez

Source: cointelegraph