Bitcoin is going through a patch of steady downfall as the investors received alarming news about China announcing a ban on Bitcoin mining. The country has always been vigilant against the growing popularity of the crypto trade, and this news confirms a further decisive step against curbing the investors’ profits.
According to the Financial Stability and Development Committee of the State Council headed by the President’s advisor Liu He, the Chinese government will take restrictive measures to limit the mining of bitcoins and the proliferation of transactions to minimize the spread of individual losses on a mass-scale.
Post banning all forms of cryptocurrency mining in the country, Bitcoin is expected to encounter another huge slump as China, one of its top operating markets will remove itself from the crypto scenario. Further investigation into the statement revealed that China’s decision was backed by a number of reasons, among them economic security being only one. The government suspects the proliferation of bitcoin transactions might have exacerbated national security problems like embezzlement, trafficking of contraband items, and high consumption of energy resources. It is not surprising that the economic institutes of the country received a cautionary notice the previous week prohibiting them from crypto transactions.
However, China’s huge step is not a rare occurrence in the global market, but a glance at the recent phenomena makes it evident that other countries are equally alarmed by the market potential of Bitcoin. For example, the USA expressed its concerns over Bitcoin being utilized to execute anti-social activities. Suspicions were confirmed when an accidental release of news regarding the US government’s investigative proceedings against the cryptocurrency exchange platform Binance allegedly fueled serious illegal activities.
The energy consumption levels of the Bitcoin mining process is another reason causing its decline in popularity. As Elon Musk confirmed, almost 400 metric tons of carbon footprint were produced by the amount of Bitcoin required to purchase a Tesla Model 3. By the time he announced his decision not to accept Bitcoin for Tesla due to environmental concerns, the carbon footprint had increased by another 100 metric tons, a sure cause for alarm.
The aforementioned factors have significantly affected the behavioral pattern of the cryptocurrency miners who have started seeking out cheap fuel sources in less populated regions. Of late, many companies have started showing interest in deserted power plants to reuse them for bitcoin mining. For China, this means a shift of operations from the mainland to the neighboring countries of Kazakhstan and Afghanistan.