On Monday cryptocurrencies tumbled as China’s crackdown on bitcoin mining expanded to the province of Sichuan. Bitcoin fell to as low as $32,288 for the first time since June 8, and was last down 7.9% at around $32,781.
Beijing Crackdown on Bitcoin Miners
Smaller rival ether dropped below $2,000 for the first time since May 23, before trading 10% lower at 2019.01. Cryptomining is big business in China, accounting for more than half of global bitcoin production.
Chinese mines power nearly 80 percent of the global trade in cryptocurrencies despite a domestic trading ban since 2017, but in recent months several provinces have ordered mines to close as Beijing turns a sharp eye to the industry.
Authorities in the province of Sichuan ordered the closure of 26 mines last week, according to a notice widely circulated on Chinese social media and confirmed by a former bitcoin miner. The price of bitcoin sank to as low as $32,309. The unit has taken a severe hit in recent weeks, having hit a record near $65,000 in April, partly because of Beijing’s crackdown.
The notice reportedly instructed power companies to stop supplying electricity to all cryptocurrency mines by Sunday. It vowed a “complete clean-up” and ordered local governments to carry out a “dragnet-style investigation” to find and shut down suspected crypto mines.
The province represents one of the largest bases for mining in the country. A former cryptocurrency miner told AFP they had “closed everything” in line with the requirements in recent days. “There have been working groups coming to check… making sure we shut down operations and removed the machines,” he said.
Sichuan, a mountainous region in southwest China, is home to a large number of cryptocurrency mines, which require a colossal amount of energy supplied by the province’s cheap and abundant hydropower.