The Bitcoin mining crackdown in China has significant ramifications for the cryptocurrency industry. Bitmain is stepping up its efforts to ease the burden on Chinese miners looking to offload their equipment in light of the ban.
Bitmain, the cryptocurrency infrastructure company behind the Antminer brand, will temporarily halt the sale of mining machines to help secondary sellers offload their supplies following China’s wholesale ban on Bitcoin (BTC) mining.
The suspension of new Antminer sales will begin immediately, Bitmain announced Thursday via WeChat. By suspending the sale of new mining devices, companies must resort to buying secondhand miners that previously belonged to Chinese mining rigs.
The “second-hand market is under great pressure,” Bitmain said, according to a Google translation of the announcement. “In order to help the industry transition smoothly, [Antminer] decided to temporarily suspend the global spot sales."
Bitcoin miners have been in short supply for much of 2021, even as Bitmain raced to increase production during the cryptocurrency bull market. The supply-demand imbalance was felt across the industry as California chipmaker Nvidia limited the hash rate capacity of its new GeForce RTX 360 GPU, which was originally intended for gamers.
China’s crackdown on cryptocurrencies intensified this month as lawmakers extended their Bitcoin mining ban to the province of Sichuan. By Sunday, over 90% of China’s Bitcoin mining capacity was expected to be shut down, according to Global Times, a publication backed by the ruling Communist Party.
China, which used to control roughly two-thirds of the total Bitcoin mining hashing power, has been tightening the grip on the cryptocurrency industry since at least 2017 when the government imposed bans on trading. Although Chinese nationals have found various ways to circumnavigate the trading ban, miners have no such recourse due to the significant energy consumption associated with mining.
According to various reports, China’s mining crackdown is driving miners to more favorable jurisdictions, such as Texas. As Nikkei Asia reported Thursday, Shenzhen-based BIT Mining is planning a $26 million investment in the U.S. state, where it would join Bitmain in scaling up its Texas operations.