Following reports that Chinese regulators will be cracking down on Bitcoin mining and trading activities, Chinese miners are already planning their exit strategy.
As reported by BTC PEERS, the country’s Financial Stability and Development Committee (FSDC) said during its 51st meeting that it would “crackdown on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.”
Although China is yet to release official news on the matter, the single line of comment from the FSDC is already driving several miners into panic mode. Reports have it that some Bitcoin miners are already turning to overseas mining facilities, while others are selling their coins.
Mustafa Yilham, who is the VP of Global Business Development at Bixin, a long-time bitcoin mining firm in China earlier tweeted that “in past 48 hours, Chinese miners already started to accelerate the migrating process to other countries… There will also be large quantities of Bitcoin mining machines available for sales."
Yilham goes further to explain that the regulatory uncertainty is creating bearish sentiment amongst Chinese miners. Agreeably, the negative sentiment has affected the price of Bitcoin and spilled over to the entire cryptocurrency market.
There will be some enforcement actions in [the] coming weeks. No one knows the level of enforcement action that will be taken at the moment.
Dovey Wan, a founding partner at Primitive Ventures, corroborates Yilham’s claims. She said local bitcoin miners have been contacting her to sell their machines or ship them overseas.
Other behemoth players in the Chinese space are also bracing for impact. Chinese-based mining pool BTC.top, which controls about 1.5% of Bitcoin’s hash rate, has said that B.top, its subsidiary mining equipment brokerage segment, will seize serving customers from mainland China. Crypto exchange Huobi has also shut down its mining pool service and suspended the sales of its mining products in China.
Fear, Uncertainty, and Doubt
Amid the rumors of the regulatory clampdown, the crypto market has been overtaken by FUD. Although China moved to ban Bitcoin in 2017, the country has remained a major stronghold for the leading digital asset behind the scenes.
Data shows that the “Fear and Greed Index” of the crypto market is still in the “Extreme Fear” region.