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Chinese Crypto Mining Ban: Winners and Losers

UTC by Daria Rud · 4 min read
Chinese Crypto Mining Ban: Winners and Losers
Photo: Depositphotos

Let us have a look at the biggest miners that could take advantage of the Chinese crypto mining ban and shift from the Eastern to the Western side.

Back in June, the Chinese government banned crypto-mining activities, citing their carbon neutrality policy. It was not the first time the authorities have been hard on digital currencies, but this became the most serious one. Following the Chinese crypto mining ban, China’s main cryptocurrency mining hubs, including Inner Mongolia, Xinjiang, Yunnan, and Sichuan, decided to root out the business. Other miners started leaving the country as well. Many are seeking cheap electricity and consider countries like Belarus, Sweden, Norway, Angola, and Congo.

Previously, over 75% of the miners that validate Bitcoin (BTC) transactions were based there. This is due to the fact that China manufactured most of the world’s mining equipment. Besides, massive mining farms were taking advantage of extremely cheap electricity prices in the country. Now, referring to environmental issues and saying cryptocurrencies disrupt economic order and facilitate illegal asset transfers and money laundering, the Chinese government also worries about potential competition for the digital yuan.

Meanwhile, North American miners have been ramping up their capacities in order to secure a larger share of the worldwide distribution of the hash rate. Let us have a look at the biggest miners that could take advantage of the Chinese crypto mining ban and shift from the Eastern to the Western side.

Riot Blockchain

One of the largest bitcoin miners in North America Riot Blockchain Inc (NASDAQ: RIOT) was making acquisitions from leading Bitcoin miner makers like Bitmain to expand its operations. For example, back in May 2020, Riot Blockchain purchased 1,000 next-generation Bitmain S19 (110 TH) Pro Antminers for $2.4 million. Soon, it added 1,040 next-generation Bitmain S19 (95 TH) Antminers more, for $1.9 million.

In August 2020, Riot Blockchain executed another $17.7 million purchase agreement of 8,000 next generation Bitmain Antminer S19 Pros. Besides, in April this year, the company signed an acquisition deal with Whinstone US Inc, a Texas-based data centre developer and subsidiary of Northern Data AG (DB: NB2). The deal brought Bitmain the status of the leading Bitcoin miner in the US.

And while Chinese miners are struggling, Riot Blockchain is enjoying the success. The company is proving its triumph by figures released recently. In June, the company stated it mined 243 BTC, a 406% increase from its June 2020 production figure. This has brought year-to-date Bitcoin mining total of Riot Blockchain at 1,167 BTC.

According to Riot Blockchain, at the end of June it was holding over 2,200 BTC, including all of the Bitcoin coming from its mining operations.

Marathon

Marathon Patent Group (NASDAQ: MARA) is one of the main Riot Blockchain’s rivals. The company has also purchased a lot of mining equipment from Bitmain since last year. Besides, the company partnered with Beowulf Energy, relocated miners to 105 MW BTC Mining Data Center in Hardin, MT, and reduced aggregate mining costs 38%.

Further, Marathon directed all of its hashrate to the Marathon OFAC Pool, becoming the first North American enterprise Bitcoin miner to produce BTC in a manner that adheres to anti-money laundering (AML) and the U.S. Department of the Treasury’s Office of Foreign Asset Control’s (OFAC’s) standards.

Currently, Marathon is planning to build a 300 MW carbon-neutral data center that will house 73,000 Bitcoin miners. As of March 2021, it was deploying 103,120 miners.

Hive Blockchain

Another mining company worth mentioning is Canadian Hive Blockchain (CVE: HIVE) famous for using green-energy-powered data centers for crypto mining. The sources of green energy are the facilities in Iceland and Sweden. In 2020, the company made a lot of efforts to produce Ethereum (ETH).

Hive Blockchain has a yearly ASIC capacity goal of 1000PH/s. It will be overachieved after deployment of the purchased 6400 Canaan AvalonMiner 1246 next-generation.

Earlier in July, Hive acquired 3,000 MicroBT M30S miners for its facility in New Brunswick, Canada. This is expected to take the company’s hashing potential up by 0.264 EH/s to reach a total hash rate of 0.83 EH/s.

In addition, the company got listed on Nasdaq and the StealthEX custody-free currency exchange.

Hut 8

The last but not least is Hut 8 Mining Corp. (TSE: HUT), also a Canadian miner. It was the first Canadian miner that the Nasdaq Global Select Market listed.

The company has been lately increasing its mining capacity, upscaling of its miner hardware. Recently, Hut 8 announced a $44.373 million purchase of 11,090 MicroBT M30S, M30S+ and M31S miners from SuperAcme Technology (Hong Kong) Limited. The full deployment will be completed in December this year. The acquisition adds to the previous purchase of 863 M30S+ and M30S miners that will be fully deployed this month. The production capacity with both purchases after the full deployment will make up approximately 2.5 E/H.

With this capacity, Hut 8 predicts its daily Bitcoin production will jump from between 6.5 to 7.5 BTC to between 14 to 16 BTC.

Blockchain News, Cryptocurrency news, Editor's Choice, Market News, News
Daria Rud
Author Daria Rud

Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.

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