Today, Crypto Twitterers started spreading rumors that China regretted its crackdown on crypto after Bitcoin (BTC) soared to a new all-time high in the past week.
Regret mining ban
China’s Bitcoin mining ban caused an exodus of miners from China. At its peak, China controlled more than 50% of Bitcoin’s global hashrate. Those of us from China, who know how the country’s government works, are highly skeptical. However, it is still interesting to see how this misunderstanding arose.
The rumor probably originated for two reasons. First, China’s National Development and Reform Commission stated on Oct. 21 that it would add “virtual currency mining” to its list of eliminated industries after polling public opinion. When an industry is added to the list, it effectively ceases to exist within China.
Where China’s National Development and Reform Commission seems a little out of place in the country’s current market economy, its word remains binding.
The committee first listed virtual currency mining in 2019. But after seeking advice, the industry was taken off the final list. That’s why some people think that public opinion can save the industry again.
But this is impossible. By 2020, China has made a global commitment to carbon neutrality. Moreover, Chinese policymakers believe that Bitcoin mining wastes energy. The political pressure on Bitcoin mining in 2019, when public opinion averted a crackdown, was much less than in 2021. And it was a small number of miners in 2019 that managed to lobby the government. Public opinion in China is against Bitcoin mining because it doesn’t create jobs and miners don’t pay taxes.
US has surpassed China
In addition, the committee re-released the news that the United States has surpassed China to become the largest Bitcoin mining country. Does this mean that the committee regrets the events that led to this?
That chance seems very small. It could also be interpreted from a different angle, some Chinese government officials believe that more Bitcoin mining will disrupt America’s carbon neutrality and disrupt its financial order. So the amplification of this news could just be a form of gloating. Moreover, this news can easily be taken by senior Chinese governments to indicate that the country has successfully completed the task of fighting Bitcoin mining.
Inspections have trickled down to small local governments, which use network technology to find mining IPs. A large number of mining companies have been dissolved and almost all have left China. And while research and development of Bitcoin mining chips and machines will remain in China for now, Bitmain has announced that it will no longer ship new machines to Chinese users.
In short, Bitcoin mining has become the enemy of carbon neutrality in the eyes of China. China’s top official economic media says:
“Bitcoin mining has high energy consumption, high pollution, high damage and low output. It will use precious powers and waste many resources.”
It is clear that China’s Bitcoin mining industry, which once dominated the world, is on the brink of a complete withdrawal from the market. In addition, it is hard to imagine that it will return in the near future.