Mine Closure In China, Continues To Undermine The Value Of Bitcoin

The Bitcoin price chart on the market has continued to fall since the Chinese government banned Bitcoin mining. (photo credit: Maxim Hopman/unspalsh)

JAKARTA - The price of Bitcoin and other cryptocurrencies has struggled in recent weeks. This is due to the crackdown on bitcoin miners in China that continues to worsen.

The price of bitcoin fell in May, and lost 50% of its value, and has been under pressure ever since. Meanwhile, ethereum, the second-largest cryptocurrency after bitcoin, has also fallen in value by more than half. Now the price of ethereum is struggling to stay above $2,000 per ether token.

Now, after reports of former bitcoin and ethereum miners in China having dumped GPUs, it suggests at least some of China's decommissioned mining capacity is not coming back. Analysts have warned crypto prices are currently "in jeopardy."

“This is not surprising given the fact that China is seriously cracking down on bitcoin mining in the country, but the development could be interpreted as fundamentally bearish,” Adam James, senior editor at Hong Kong-based Bitcoin and crypto exchange OKEx, wrote in his latest analysis. He added that Market sentiment has declined significantly, over the past few days.

Meanwhile, reports have emerged on social media that China has begun blocking access to major cryptocurrency exchanges. This week, users reported that Huobi and Binance briefly needed an incognito VPN to access the network.

Binance, the world's largest bitcoin and crypto exchange by volume, has been battling global regulation in recent weeks, with the US and countries across Europe also increasing their scrutiny of the exchange.

China's crackdown on bitcoin and crypto mining last month forced those using high-powered computers to secure bitcoin networks and validate transactions overseas.

The expulsion of bitcoin and crypto miners from China sent the bitcoin hash rate, a measure of how much computing power is directed at the bitcoin network, to a 13-month low over the past two weeks.

The ethereum network has also been hit by China's crypto mining ban, seeing its network hash rate drop by around 20% since May as miners were shut down.

After dropping below $30,000 in recent weeks, bitcoin's price has stabilized just above the psychological level but its failure to recover any meaningful losses since its May crash has many crypto market watchers now worried.