China has been a dominant power in cryptocurrency mining. Ripple’s latest submission termed Bitcoin and Ethereum as Chinese-controlled cryptocurrencies because the country controls a large percentage of BTC and ETH hash rate.
According to a report by Bloomberg, cryptocurrency mining companies in China are leaving the country due to high electricity costs and regulatory concerns. Miners are planning to shift to the Nordic region due to a plunge in electricity prices.
Electricity is the most important thing for cryptocurrency miners and the recent price rise and supply interruption in China forced mining companies to consider other locations. A significant jump in power production due to extreme weather conditions in countries like Norway and Sweden resulted in cheap electricity prices.
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“There is a very important strategic shift away from mining in China to mining in western countries like Sweden as Bitcoin investors become more public and want more stability and critical safety. It is one of the biggest developments in Bitcoin mining to look out for,” Philip Salter, head of operations at Genesis Mining told Bloomberg.
China’s cryptocurrency market has faced many challenges in recent years. In 2017, the Chinese government announced a nationwide crackdown against Initial Coin Offerings (ICOs) and completely banned cryptocurrency trading. However, China remained silent against crypto mining due to the reason that Chinese miners were bringing billions of dollars in Bitcoin and Ethereum mining revenues. In 2019, China started targeting cryptocurrency miners as well due to regulatory issues. This year, some miners also reported power cut-offs in some regions. In addition to the regulatory concerns and rising prices of electricity in China, miners are also finding it difficult to convert their cryptocurrency revenues in cash due to a crackdown on local exchanges. There is a cash crunch in China for the miners of digital currencies.
Cheap electricity in countries like Sweden and Norway looks like a perfect opportunity for Chinese cryptocurrency miners.