Without so much warning, the tiger-like strides of Bitcoin alongside other digital assets were cut short in May. The bloody market capitulation would go down in the DeFi history as one that traders would seldom want to be reiterated.
The world of cryptocurrencies is slow to recover from the mid-May plumage which is threatening to spread further, hardly giving room for analysts to make careful observations. Notable amongst several reasons for the current BTC wreck is the cryptic comments of Elon Musk and more of the Chinese bickering with digital assets.
While Bitcoin enthusiasts silently muttered prayers for the Chinese crackdown to turn out mild, the Asian nation is bent on sweeping off the industry. In essence, the home of Bitcoin mining that contributed over 62 percent of BTC’s computing power is lost. The adverse effects of the crackdown are a major factor; the leading crypto asset is yet to rear its head and take to loftier greens.
We all know about the impact of the mining crackdown in China on Bitcoin miners. It’s time we examine what these deserting miners plan to do.
Examining Likely Options
Some miners are leaving China to other climes that they consider conducive for their operations while others are putting their equipment to the market. Van Kirk, director of equipment marketplace Kaboomracks said that Chinese miners are fire-selling their rigs. According to him, these miners are put off by the hostile circumstances surrounding their eviction. To them, it might be mere wishful thinking to return to their bases in China.
Some of these machines sold for less than 40 percent of their price include the GTX 1070 graphics card and a diverse range of CPUs. This surge in equipment sales and discontinuation of operations is the major contributor to the current Bitcoin hashrate running negative.
Evacuating miners are being wooed to consider certain locations as viable alternatives for their operations. Most notable amongst these locations is Texas, Kazakhstan, Europe, Canada, Florida, and even certain locations in Africa. The Mayor of Miami Francis Suarez reportedly asked some prestigious mining companies to settle in the area.
“We want to make sure that our city has an opportunity to compete”, he was quoted.
Why Texas Isn’t the Best Option
Since Bitcoin operates on a proof-of-work (POW) consensus, miners are needed to authenticate transactions. If there are a small number of active miners, the hashrate drops and the security of the blockchain is at stake. This is because the mining difficulty reduces dramatically, leaving an enticing gate open for hackers.
Though Greg Abbott the governor of Texas might be pro-Bitcoin, the city might not be able to handle the enormous responsibility of hosting Bitcoin miners. The weather in Texas is quite unpredictable and during the winter, blackouts are very common amidst an unfriendly freezing temperature.
However, miners must study their next location properly before making a decision. Besides, it’d be beneficial if miners avoid settling in one area to prevent a similar occurrence of monopoly like the case of China.
The future of Bitcoin is sitting at an edge. The lowering value of the foremost crypto is making investors apprehensive. Interestingly, all hopes are not dashed yet.
Institutional entities like MicroStrategy are taking advantage of the current market trend to gather more of the cryptocurrency. In essence, the hopes of recovery are fixed to the next movement of the market.
As JPMorgan Analysts prescribed, a decline to the $25k range could aid Bitcoin to develop solid stability. It would be better for altcoins too, to break from the Bitcoin monopoly and thrive on their terms.