Miners Unable to Sell Their Bitcoin as China Freezes Accounts

By November 18, 2020Bitcoin Business
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Bitcoin mining farm

China has closed off many Over the Counter (OTC) selling pipelines for bitcoin and crypto miners according to local reports.

A significant number of miners have been unable to cash out for a month, leaving them in a very difficult position regarding the hefty energy costs of mining.

That may explain a massive plunge in bitcoin’s hashrate earlier this month, down from 146 exahashes to 106 exahashes per second with it not fully recovering so far.

Bitcoin hashrate, Nov 2020
Bitcoin hashrate, Nov 2020

Apparently some 76% of polled miners now say just covering energy costs is their most difficult task with two senior operatives at Huobi and OKex recently arrested in China.

Both exchanges have opened OTC trading platforms to serve the Chinese market, but a crackdown under the guise of money laundering has been ongoing for much of this year. Miners however were largely left alone, until now.

“A large miner said that the most headache and most difficult thing now is to pay electricity bills. There are also miners who said that the mining machine has been shut down for a month because they cannot sell the currency to pay the electricity bill. Some OTC companies that specialize in serving miners have also terminated their business,” local media reports.

China accounts for some 65% of the bitcoin mining hashrate and about 80% of bitcoin asics manufacturing, making it a hot centre for mining.

The industry brings into the country billions a year through the sale of bitcoin on open markets, something de facto banned in China which closed crypto exchanges in 2017.

Allowing mining while closing exchanges has courted criticism of stealth protectionism, something that China has ignored for years.

Now that they’re planning to issue a central bank digital currency, however, they may be planning to declare bitcoin illegal by an Act of Parliament.

A draft Banking law that aims to do just that has already been proposed, with the Chinese Communist Party and their central bank so gradually ratcheting up the heat on bitcoiners in the country.

Now that’s to the point where the bank accounts of miners are being frozen as well as their trading providers, so effectively chocking up the industry in China to the benefit of decentralization as plenty will probably move to America, the cheap hydro power of especially Balkan Europe, as well as to neighboring regions around China.

A significant number of miners have been unable to cash […]

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