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China will hit the cryptocurrency mining hard, the price of bitcoin should rise

According to the reports from many portals and other media outlets, the Chinese government plans to undertake an action towards the cryptocurrency mining industry in the following months, especially towards the bitcoin mining operations, because a large quantity of bitcoins is mined in China.

Analysts say this move will push up the price of bitcoin due to decreased supply.

It is not likely the Chinese government would completely ban the cryptocurrency mining in a short-term, because it is hard to achieve that with strict regulations. There are rumors that bitcoin miners were paying money to local electrical power providers to be able to perform mining operations without obstructions. The source of this rumors of corruption within the mining sector is an anonymous bitcoin miner. According to CNLedger: “Regulators are asking local departments to report the current status of bitcoin mining companies under administration, and ‘guide the mining firms to exit in an orderly manner’ by taking various measures from the aspects of electricity, land, tax, environmental protection.”

From November last year, Chinese miners are exploring other potential regions for their mining operations. Despite the fact that Northwest China has become a popular mining destination because of the low price of electricity, other regions such as Chile and Norway have cheaper electricity and naturally cold climate, which is beneficial for the bitcoin mining operations.

Analysts claim that a potential decrease of mining operations in China could push up the price of bitcoin, but only short-term.

If the Chinese miners are forced by the government to abandon their operations and move on, they will simply move to better regions with cheaper resources, such as Chile and Norway, and create their mining centers there.

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