- 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
Ripple's XRP set sights on $1.100 following renewed investor interest
Ripple's XRP rallied nearly 20% on Tuesday, defying the correction seen in Bitcoin and Ethereum as investors seem to be flocking toward the remittance-based token.
Dogecoin Price Prediction: Could DOGE ETF spark new all-time high after 130% rise?
Dogecoin rose over 15% on Tuesday as traders anticipate a price move toward the $1 threshold following Bloomberg analyst Eric Balchunas's post regarding a DOGE exchange-traded fund.
Hedera's HBAR rallies nearly 20% as Canary Capital files for HBAR ETF
Hedera's HBAR is up nearly 20% on Tuesday as Canary Capital submitted an S-1 registration to the US Securities & Exchange Commission for an HBAR exchange-traded fund.
Ethereum Price Forecast: ETH down despite hype from Beam Chain unveil
Ethereum is down 1% on Tuesday despite developer Justin Drake proposing the Beam Chain, a new consensus layer that aims to ship a series of changes that will fast-track the Main chain's roadmap to faster block times and quantum resistance.
Bitcoin: Further upside likely after hitting new all-time high
Bitcoin hit a fresh high of $76,849 on Thursday as crypto-friendly candidate Donald Trump won the US presidential election. Institutional demand returned with the highest single-day inflow on Thursday since the ETFs’ launch in January.
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.