- Chinese government recently imposed a crackdown on cryptocurrency mining and trading.
- The restrictions have adversely affected crypto-related businesses
- Kazakhstan is significantly wooing miners with some of the world’s cheapest electricity and pro-crypto legislation.
Although China has not banned crypto ownership at an individual, its crackdown has adversely affected the adoption of crypto assets. In May, the Chinese government asked financial institutions like banks and other payment platforms to stop providing clients with any services associated with cryptocurrencies.
Consequently, a number of crypto firms have closed down their businesses while others have shifted their business locations. For example, BTC China (BTCC), which runs the oldest Bitcoin exchange in the country, recently announced the closure of its crypto trading business amid the country’s crackdown on Bitcoin mining.
Although China has long been the home for more than 50% of the world’s Bitcoin miners, the country currently wants them out as soon as possible. In the month of May, China’s government imposed several crackdowns on Bitcoin mining and trading, resulting in “the great mining migration.” The exodus is currently underway, and it could be a game-changer for Kazakhstan.
Meanwhile, as the crypto crackdown continues, China’s largest crypto exchange Huobi has put more strict measures for fiat currency transactions. According to Huobi, all users can make crypto withdrawals only 24 hours after making their purchases, and some users need 36 hours. Since some people in China are known to use crypto coins to launder money, Huobi has launched the “Limited time limit withdrawal” to make it more difficult for people who use black money to purchase cryptocurrencies to transfer away.
Kazakhstan positions itself for incoming miners
Kazakhstan, which is China’s next-door neighbor, has become the most potential destination of choice. The central Asian country of Kazakhstan is rapidly becoming a new hotspot for the crypto mining industry, following an exodus of mining operations from China.
Since it is a major producer of coal, Kazakhstan’s coal mines provide a low-cost, abundant energy supply. While the government has building-friendly policies which make it easy to construct offices quickly, such a lax attitude about building bodes well for crypto miners who need to construct physical installations in a short period of time.
Chinese Bitcoin mining firm BIT has already shifted 320 mining machines to the former Soviet Republic, and another 2,600 are expected to arrive soon.
Although Chinese government electricity plants have restricted mining, private electricity plants continue to service crypto miners. However, most of the electricity is produced by the government’s power plants, therefore, miners have no choice but to move, and this makes them desperate to find other locations.
Energix, one of the biggest cryptocurrency mining companies in Kazakhstan, is working with miners preparing to scale up amid increasing demand for its services. The crypto mining company is in talks with other firms, mostly from China, to invest in building new mining facilities in various locations in Kazakhstan.
While the logistics of moving from China to Kazakhstan appears to be more straightforward, the journey to the Old Silk Road may not be easy across the pacific.
Kazakhstan appears to have attracted a lot of interest among Chinese miners that some stakeholders say that the country may be running out of capacity to accommodate more. Besides that, Kazakhstan is known to have plans to introduce a tax on power consumption by cryptocurrency miners. A new bill, which forms part of amendments to the tax code, is under review in the Senate. If passed, then it would require miners to pay one tenge (about US$0.0023) per kilowatt-hour for the electricity they use.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.