Hello and welcome to this week's edition of Overbit Round-Up.
The focal point of today's Overbit Roundup will be the ongoing crackdowns in China regarding cryptocurrency mining. These crackdowns have sent ripples across the industry as Bitcoin hash rate sits at a half-year low, according to CoinDesk.
China has long housed more than half of the world's bitcoin miners, but Beijing now wants them out as soon as possible.
In May, the government announced a crackdown on bitcoin mining and trade, sparking what's been nicknamed "The Great Mining Migration" in crypto circles. This migration is currently occurring, and it has the potential to alter the game for Texas.
"One miner told us that only government electricity plants have restricted mining and private ones will continue to service miners," Bekbauov told CNBC. "But most of the electricity is generated by government power plants, so miners will have to move. That makes them uncertain and desperate to find other locations," he said.
After failing to fulfil Beijing's environmental objectives, provincial officials opted to tell bitcoin miners two months to leave, blaming its energy shortfalls on crypto miners.
According to Compass Mining Memo, which cited statistics from MiningPoolStats, China-based 1THash, one of the world's 15 largest mining pools, lost nearly 70% of its hash rate last week.
If all of the miners leave China, there will be less fossil fuel-powered mining, but the network's percentage of renewable energy-powered mining would decrease. According to some observers, the decline in Bitcoin hash rate will be reversed eventually when some miners leave China for other locations.
With China housing such a substantial amount of Bitcoin (and other cryptocurrencies') hash rate, time will tell what such an event will have on the market.
While certainly pessimistic for the market short-term, there always seems to be a flipside to look at in the cryptocurrency industry.
To quickly close out this week's edition, we look at a new report out of the Financial Times, which indicates that financial firms and hedge funds are looking to beef up their cryptocurrency allocation in a significant way.
According to a study of 100 hedge fund chief financial officers performed by fund administrator Intertrust, executives anticipate holding an average of 7.2% of their assets in cryptocurrencies in five years. If this is repeated across the industry, it may amount to around $312 billion in crypto assets.
Such a stark departure this is for an industry that had little-to-no industrial recognition just four years ago.
Stories like these amid a mining ban in China do well to illustrate the continuously moving nature of crypto, one in which the long-term trajectory continues to be upward.
As always, thanks for reading Overbit Round-Up. Take care and safe trading until next time.