Mining companies in China close down mining equipment
The BTC mining speed of the mining guilds in China has plummeted
China has started tightening and tightening the ban on mining clubs operating in the country. Videos of miners who shut down their miners at the request of the Chinese government spread on Chinese social media channels Wechat and on international social media channels such as Twitter.
Videos shared on social networks are difficult to verify that the content is correct or they are videos that were cut to cause fear on social networks. However, on-chain data shows that the mining speed of mining pools in China has decreased sharply in relation to the mining speed (e.g. AntPool). This shows that the news that miners will have to shut down their miners is not a rumor, but the Chinese government is actually cracking down on mining pools.
Meanwhile, other mining pools like Foundry USA, the seventh largest mining pool in the world, have increased the mining speed. With the current situation, there is also an opportunity for the speed of mining in China to expand to other countries around the world. Many countries are open to accepting mining associations such as the USA, El Salvador, Paraguay or even Russia have this intention.
Miners in China can now stop mining until they can resume. Another group could move to another country to welcome it, or there are mining pools, especially small unsustainable ones, that will give up Bitcoin mining altogether. Regardless of the option, miners still need to generate revenue from the sale of Bitcoin in order to have money to pay the fees incurred. Therefore, there will be sales of miners in China in the short term.
Not only is the current BTC price affected by the information from China, but the interest rate information released by the Fed will also be affected. As crypto gradually becomes part of the traditional financial market, the information about interest rates will also have a major impact on the price. And now traditional investors are investing in gold, stocks are also investing in crypto, their investment decisions are influenced by one another.
Grayscale reduces BTC purchases
Grayscale Large Bitcoin Investment Fund has been slower in acquiring BTC since January 2021. And so far there has been no sign of buying more BTC.
There are two theories that Grayscale will stop buying BTC. First, Grayscale stopped buying BTC because they wanted to preserve their existing capital so the BTC ETF could be deployed quickly if approved. Previously, Grayscale had hired someone to oversee the law related to ETFs.
In the second case, it is possible that Grayscale shares are trading at a lower price than buying BTC. Hence, investors are focusing on buying Grayscale stock rather than buying BTC on deposit with this company.
At this time, we don’t see any signs of any other major investment firms and institutions buying BTC. On-chain data also shows similar results. At the moment, the price of BTC is not clear, so this may be one reason why investors may not have made an investment at this point in time.
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