Is China Considering Lifting The Bitcoin Mining Ban? The NDRC Runs Public Survey

The National Development and Reform Commission is asking the Chinese public for their opinion on the Bitcoin mining ban. Is China’s government playing 4D chess or are they confused and considering backtracking their decision? Can they unring this particular bell or is this a too little too late scenario? Do they really care about what the general public thinks or is this survey just for the optics?

As it usually happens with the Chinese government’s actions, they leave more questions than answers. Nevertheless, let’s unpack the information available and see what Twitter thinks about the situation.

First of all, the official announcement says:

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“In accordance with the relevant work arrangements for the rectification of virtual currency “mining” activities, the National Development and Reform Commission and relevant departments have revised the “Industrial Structure Adjustment Guidance Catalog (2019 Edition)”, and now solicit opinions from the public.”

So, they’re considering “rectification of virtual currency “mining” activities,” by which they mean the Bitcoin mining ban. And by “the public,” they mean “Relevant units and people from all walks of life can provide feedback.

BTCUSD price chart for 10/25/2021 - TradingView

BTCUSD price chart for 10/25/2021 - TradingView

BTC price chart for 10/25/2021 on FTX | Source: BTC/USD on

Is China Actually Considering Lifting The Bitcoin Mining Ban?

Opinions differ. However, according to Three Arrows Capital’s Su Zhu, that’s exactly what’s happening.

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People in the replies are not convinced. They theorize that the Chinese government is just trying to create a database of people in favor of Bitcoin mining, or that they are just thinking about lifting the Bitcoin mining ban so they can ban it again on the next cycle. Others doubt the miners will return or that new mining operations will pop up. A few, though, think that the Chinese government realized they made a trillion-dollar mistake.

Chinese journalist Colin Wu, however, sees the news from another angle. “It is not un-banning. On the contrary, its content is to write crypto mining into an industry that must be eliminated.”

And he links to a .pdf that says the same thing as the original document, but in a different tone altogether:

“In the “Industrial Structure Adjustment Guidance Catalogue (2019 Edition)”, the elimination category “I. Item 7 is added to “Outdated production technology and equipment” and “(18) Others”, and the content is “virtual quasi-currency’mining’ activity.”

The phrases “Outdated production technology” and “Virtual quasi-currency’mining‘” hit different and tell another story about the Bitcoin mining ban. Wu finishes by saying that “in terms of the current Chinese government’s strong opposition to Bitcoin mining, these comments are likely to be meaningless.

Conclusions And Speculation

Tick-tock next block. China’s Bitcoin mining ban was a blip on the radar. The network kept running as usual and, a few months later, Bitcoin’s hashrate recovered. We at NewsBTC have been trying to figure out the logic behind the Chinese government’s moves regarding Bitcoin. Unsuccessfully. We looked into the new “China Model” and the small hydropower stations question, wondered about the waning of their hashrate dominance, and looked closely into the now-defunct industry.

Even though it seems like a logical theory, we don’t know if the Chinese government is just clearing out the competition for their future CBDC. We are not sure if this whole operation is part of a bigger one that is trying to control all of the Chinese billionaires. Or if they’re just asserting their dominance and showing everyone who’s the boss. We just know that the Bitcoin mining ban might be the biggest mistake of the century. And we’re not even talking about the trillions in fiat currency that the country is losing. 

The Chinese are banning themselves from participation in the winning open network, from interaction with the biggest idea of the century, from owning a piece of the pristine asset that will change the world for the best.

Did they realize all of this and are gearing up for a change of mind?

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CBECI Report: China’s Hold Over Bitcoin Mining Was Waning Before The Crackdown

Shocker! According to the latest CBECI update, China’s control over Bitcoin mining was already waning. The Cambridge Bitcoin Electricity Consumption Index shows that and much more, it “provides an up-to-date estimate of the Bitcoin network’s daily electricity load.” However, China is the headline. The government’s recent ban on Bitcoin mining left the world speechless, and this feels like another piece to solve that puzzle. 

It doesn’t quite fit, though. According to Arcane Research, CBECI numbers say that:

China’s share of total Bitcoin mining power has declined from 75.5% in September 2019 to 46% in April 2021 — before the restrictions on Chinese miners were even imposed. That figure is much lower than the older estimate of 65%.

Related Reading | Why China’s Crackdown On Bitcoin May Be Just Beginning

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That’s a sharp decline. Why did China’s miners lose so much ground before the ban? Did the Chinese government turn off the machines that they reportedly own? Why would they do that? Is everyone missing an obvious explanation for all of this? It’s also very interesting that the CBECI shows that the United States and Kazakhstan were growing at a tremendous rate before the ban.

BTCUSD price chart for 07/22/2021 - TradingView

BTCUSD price chart for 07/22/2021 - TradingView

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Bitcoin Mining In The United States And Kazakhstan 

Arcane Research crunched the numbers, and apparently:

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Over the same period, the United States’ share of total Bitcoin hashrate increased from 4.1% to 16.8%, making it the second-largest Bitcoin mining location. 

Following behind is Kazakhstan, with an almost six-fold increase of hashrate share — from a mere 1.4% in September 2019 to 8.2% in April 2021.

That ‘s curious. After the government ban came into effect and the miners turned off their machines, we worried about the Bitcoin hash rate going into a death spiral. The great miner’s migration was on its way, and guess who were the forecasted big winners:

Tons and tons of mining equipment are currently traveling to their new homes. There are reports of a huge operation in Kazhakstan, a neighboring nation of China. There are also rumors of equipment and personnel already settling down in Texas. The US state is making a push to become a Bitcoin mining capital, and apparently, the efforts already bore fruit. 

Remember, though, everything the CBECI numbers show happened before the ban.

Is there something we’re missing?

CEBECI, a graph showing Bitcoin hash rate dominance

CEBECI, a graph showing Bitcoin hash rate dominance

Country share of global Bitcoin hash rate | Source: Arcane Research

How Do They Get The CBECI Numbers?

The Cambridge Bitcoin Electricity Consumption Index explains the methodology they use:

The underlying techno-economic model is based on a bottom-up approach initially developed by Marc Bevand  in 2017 that uses the profitability threshold of different types of mining equipment as the starting point.

Given that the exact electricity consumption cannot be determined, the CBECI provides a hypothetical range consisting of a hypothetical lower bound  (floor) and a hypothetical  upper bound  (ceiling) estimate. Within the boundaries of this range, a  best-guess  estimate is calculated to provide a more realistic figure that approximates Bitcoin’s real electricity consumption.

So, it’s a very elaborate educated guess. However, it’s based on real data and a range of estimations. Does it tell us anything about the curious results they got? Is the data telling a story that we’re missing? 

Related Reading | How China Bitcoin FUD Is Lowering The Cost To Produce BTC

Last month, we posed a theory about the Chinese government trying to get rid of small hydroelectric plants. The whole situation is perplexing, so, we asked the following questions:

It’s possible that the government is trying to get rid of those plants. That would explain the article’s tone, it seems like it was trying to get investors to stay away from those hydropower stations. In light of this, China’s ban on Bitcoin mining could just be part of an even bigger play. They’re serious and methodically shaking things up over there. 

What could be their end-game? Is China just trying to go carbon neutral and repair the original flow of the rivers? Or is there something else at play here?

Everything the CBECI shows seems to relate to the answer to all of these questions. However, there’s at least one piece missing. The mystery persists.

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CNBC host boldly reveals he sold his BTC amid depths of bear market

Jim Cramer, the host of CNBC’s Mad Money, announced he has liquidated nearly all of his Bitcoin (BTC) holdings.

Speaking on June 21 during an interview with CNBC’s Squawk Box on the Street, Cramer asserted that BTC is ”not going up because of structural reasons,” highlighting China’s renewed regulatory clampdown.

Cramer stated that China’s central government understands Bitcoin to be a “direct threat” to the regime and its capacity to control monetary flows within the country, describing the cryptocurrency as “as a system that’s outside of their control.”

The escalating Chinese crypto mining ban has sent Bitcoin’s hash rate tumbling to an eight-month low as mining operations either shut down or move offshore. China is also clamping down on crypto trading, with the central bank urging other banks and payment institutions such as Alipay and Wechat to halt services for accounts associated with crypto trading activity.

Cramer also argued that BTC’s drop in hash rate should have resulted in gains for the asset’s price, stating: “Instead of thinking that bitcoin should go up if it is outlawed or if it is made tougher to be mined, Bitcoin goes down as if people are saying ‘I’ve got to redeem’ — when you limit mining, it should obviously go up unless there’s a worldwide redemption.”

“Sold almost all of my Bitcoin. Don’t need it.”

The Mad Money host also warned U.S. regulators may also take action against firms that pay ransomware attackers, deterring businesses from handling crypto assets.

Cramer highlighted the recent $4.4 million Bitcoin ransomware attack on the Colonial Pipeline in May, which temporarily caused fuel shortages in the southeast region of the U.S., and saw enforcement agencies step in to recover $2.3 million worth of BTC.

“In our country, I think it’s outside of our control when it comes to ransomware, and I doubt that Colonial is the first company to pay ransomware. I think they’re the first that almost shut down the East Coast,” he said, warning:

“The Justice Department and the FBI and the Federal Reserve and Treasury could coalesce and say: ‘OK guys, if you pay ransomware, we’re going to go after you.’”

Related: Biden hints at possible cybersecurity arrangement with Russia over ransomware attacks

Cramer also cited Tether as a structural “weak link” that underpins the crypto market, noting persistent controversy regarding the reserves backing USDT.

“They have not really told us what kind of commercial paper that backs them, and yet they are one of the largest buyers, and yet I can’t find anyone, any desk that does business with them,” he said.

This is not the first time Cramer has announced he has offloaded BTC. In April, he stated he had cashed out some of his holdings to pay down his mortgage, describing the experience as using “phony money paying for real money.”

Since the downturn in crypto markets which began around mid-May, The price of Bitcoin has declined by 42% according to data from CoinGecko — dropping from $56,928 on May 12 to around $31,750 as of today.