China FUD is over.

Bitcoin has moved on.

China issued yet another warning about cryptocurrencies…and nobody cared.

Bitcoin’s decentralised properties make it impervious to repeating FUD. Sooner or later, the effect wears off and we all move on - just as quickly as the Bitcoin miners did, finding new homes in Kazakhstan, the USA etc

Bitcoin Archive 🗄🚀🌔 @BTC_Archive

20,000 #Bitcoin miners cleaned and shipped out of China in the last 2 weeks.

Bitcoin Archive 🗄🚀🌔 @BTC_Archive

#Bitcoin decentralising. Thanks China 😘

And not without consequence in China. The mining exodus reduced demand for renewable energy:

Bitcoin Archive 🗄🚀🌔 @BTC_Archive

Hydro-power plants go on sale in China since #Bitcoin mining crackdown has reduced demand for electricity. - South China Morning Post

Many hydropower stations have become unviable and now being sold. Bitcoin really does incentivise renewable energy capacity.

Wu Blockchain @WuBlockchain

On China's largest second-hand trading platform, private hydropower stations are being sold in large numbers, due to the Chinese government's crackdown on mining. Their main income comes from electricity bills paid by Bitcoin mining.

Others have noted that China has “banned” Bitcoin seemingly dozens of times over the years, only to soften its stance later. This time, it really is different. Take a look at this timeline - you might need to zoom in on a mobile device. It has been a sustained assault on Bitcoin by the second largest economy in the world.

Travis Kling @Travis_Kling

June 2021 brought the most aggressive sovereign assault on #Bitcoin ever. That is not hyperbole, that is fact. Check this timeline- 25 discrete events in 30 days and I'm sure I missed a couple. A massive concerted effort from China. Yet here we are, making blocks & trading $33k.

How did Bitcoin respond?

Since it became apparent that China was serious this time and shut down mining, it had a predictable effect on the hashrate, but the blocks kept being churned out - like clockwork :)

The hashrate has bottomed out and started forming a recovery. We can attribute 3 reasons for this:

1. Bitcoin miners gradually starting up again in new locations.

2. The expansion of North American miners, especially with renewable energy like this, this and this:

Bitcoin Archive 🗄🚀🌔 @BTC_Archive

The largest renewable energy #Bitcoin mining centre in the USA is being built in Texas. • +1 gigawatt of solar powered energy • 700 jobs • Live by the end of 2021! 🚀

3. The largest ever downward adjustment to mining difficulty, effectively making it more profitable to mine BTC, thus incentivising miners around the world to bring more capacity online:

   

What about price?

Bitcoin has experienced a ~50% “crash” since peaking in April. But most of that was priced in before China’s crackdown on Bitcoin. The effect of China’s ban has been negligible.

While it’s too early to say a price recovery is on the way, Bitcoin has been trading in a range for weeks in what looks like a solid base for recovery, and the bullish among us have good reason to believe the second half of 2021 will see considerable price appreciation (I’ll dedicate another post to that soon).

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