Chinese government has taken measures to support Bitcoin miners, especially as 600,000 to 800,000 miners have liquidated their positions since 2019 due to BTC price volatility.
Thus, Sichuan province that is famous for Bitcoin mining decided to lower electricity tariffs, said analyst Joseph Young on his Twitter account.
BTC halving coincides with rainy season in China
Over the last few weeks, BTC prices have increased, but still below the level required to sustain miners’ operations in Sichuan. However, hydroelectric projects are allowed to provide power to Bitcoin miners throughout the rainy season. The energy used by such miners comes from the excess electricity generated, which is not required to supply the local community and industry.
Red Li, co-founder of 8BTC, said the coming rainy season allowed the local government to cut electricity tariff to CNY 0.20 (nearly 3 US cents) per 50,000 KW. He added that the rainy season brought energy rates down to CNY 0.28 (almost 4 cents) in 2019.
Crypto journalist Joseph Young said:
“This is optimistic for large bitcoin miners in China, especially in Sichuan.
After halving, if BTC remains in $6~$7k, F2Pool co-founder said there is real risk of more mining machines shutting down.”
The ban on Bitcoin mining and trade in China was lifted with the introduction of the “Crypto Law,” which was effected on 1 January 2020. The law is to regulate all crypto-related issues. Despite being perceived as a positive move in the crypto market, the government kept tightening grip on exchanges while gearing up for the issuance of its digital yuan.
Cryptolydian reported yesterday that SenseTime, an artificial intelligence SaaS company, has announced partnering with the Digital Currency Research Institute to provide its artificial intelligence expertise amid the central bank’s reported trials of its digital currency (CBDC).
The move is part of the government’s efforts to support blockchain projects. Thus, it decided to tap this partnership to go ahead with the development of its digital yuan.