<ul><li><strong>After years of extravagant mining, <keyword id="1334" type="LOCATION" weightage="20" keywordseo="China">China</keyword> has decided to clamp down on miners who consume a tremendous amount of energy.<br /></strong></li><li><strong><keyword id="6354947" type="LOCATION" weightage="20" keywordseo="bitcoin">Bitcoin</keyword>’s hash rate has hit a six-month low since China contributed a majority of it.<br /></strong></li><li><strong>The consequences are visible globally as Bitcoin's value dropped by 8% in a day.<br /></strong></li><li><strong>China has vowed to reduce its carbon dioxide emissions by at least 65% by 2030, prompting it to consider mining a threat.<br /></strong></li></ul>Bitcoin, the most popular cryptocurrency, has hit a massive roadblock in China. After years of extravagant mining, the country has decided to clamp down on miners who consume a tremendous amount of energy. While Beijing unveiled its new policy in May, local authorities were yet to act on it and enforce a closure. China <a href="https://cbeci.org/mining_map">hosts</a> around 70% of the world's <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">Bitcoin</a> mining capacity, called the hash rate. Now, 90% of Chinese miners have <a href="https://www.globaltimes.cn/page/202106/1226598.shtml">shut</a> shop after authorities closed the supply of electricity amid a nationwide crackdown on cryptocurrencies. <br /><br /><br />Bitcoin’s hash rate has hit a six-month low since China contributed a majority of it. From a peak of 180.66m (tera hashes per second), it has now <a href="https://www.blockchain.com/charts/hash-rate">corrected</a> to 127m. <br /><br /><br />The consequences are visible globally as Bitcoin's value <a href="https://coinmarketcap.com/">dropped</a> by 8% in a day. It was valued at more than $40,000 in mid-June but is now barely able to maintain $33,000. Ether, Dogecoin, and other cryptocurrencies have also witnessed a drop in their worth as stormy clouds continue to envelop the industry. <br /><br /><br />The <keyword id="145440" type="COMPANY" weightage="20" keywordseo="Chinese-Communist-Party">Chinese Communist Party</keyword> (<keyword id="51723" type="COMPANY" weightage="20" keywordseo="CCP">CCP</keyword>) firmly believes that cryptocurrency can pose a potential risk to the country's financial stability.<br /><br /><div type="twitter" handle="bigmagicdao" handlename="Molly" image="http://pbs.twimg.com/profile_images/1405164873638576128/tkU2IsMV_normal.jpg" favoritecount="4030" retweetcount="1345" status="We gonna witness a history in bitcoin mining tonight, all mining farms (about 8m kw electricity load) will shutdown… https://t.co/Eu3ra0aCug" createdat="1624094659000" id="1406181039265902592"></div><br /><br /><strong>What is a hash rate?</strong><br /><br />In simpler words, hash rate is a measure of the computational power per second used when mining. It also helps us understand the speed at which each block is being processed. <br /><br /><br />The hash rate relies on the performance of the processors used, hence miners prefer a collective effort via remote computing or create huge farms with hundreds or even thousands of computers working together. A higher hash rate means more resources are being devoted to processing transactions on the blockchain. <br /><br /><br />The total hash rate is determined by gathering connections from miners that could be all over the world. Whether someone wants to try mining as a hobby that may not bear fruits, or they want to run several large mining computers at once and try to make some serious coin, a pool fits everyone.<br /><br /><br /><strong>China clamps down on <keyword id="1660859" type="PERSON" weightage="20" keywordseo="bitcoin-Mining">Bitcoin mining</keyword></strong><br /><br />On May 21, the State Council's Financial Stability Committee resolved to "crackdown on Bitcoin mining and trading" to curb related financial risk at a meeting chaired by Vice Premier Liu He, according to a <a href="http://www.gov.cn/xinwen/2021-05/21/content_5610192.htm">statement</a> released late the same evening.<br /><br /><br />Bitcoin mining is concentrated in four regions of China -- <keyword id="46500" type="LOCATION" weightage="20" keywordseo="Xinjiang">Xinjiang</keyword>, Inner Mongolia, Sichuan, and Yunnan. The first two are home to some of China's largest coal-based electricity plants, and mining operations <a href="https://www.businessinsider.in/cryptocurrency/news/chinas-inner-mongolia-region-proposed-punishments-for-companies-and-individuals-involved-in-crypto-mining/articleshow/83034373.cms">were stopped</a> there a few weeks ago. The latter two are significantly green and dependent on hydropower. <br /><br /><br />The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice to 26 cryptocurrency projects. State-run electricity companies have been asked to carry out inspections to ensure crypto mining projects are no longer receiving energy.<br /><br /><br />Sichuan's initiative makes it the latest <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrency</a> mining hotspot in China to clamp down on the activity. The government, which has banned financial transactions of Bitcoin and other digital tokens since 2019, turned a blind eye to mining farms up till now. But, China has <a href="https://www.scmp.com/business/article/3113737/china-pledges-cut-carbon-footprint-65-cent-2030">vowed</a> to reduce its carbon dioxide emissions by at least 65% by 2030, prompting it to consider mining a threat.<br /><br /><br /><strong>Miners are scrambling for an alternative to China</strong><br /><br />For the crypto community, it's a worrying sign. Bitcoin has been criticised by many for its energy-intensive design, which is backed by consuming fossil fuels. Sichuan going offline means the token further relies on fossil fuels in regions like Iran, Kazakhstan, and even the US. The clampdown forced cryptocurrency exchange Huobi to suspend bitcoin mining services and sales of mining equipment in the country. Similarly, services like HashCow and BTC.TOP have stopped operations.<br /><br /><br />The latest moves are likely to accelerate the process of Chinese crypto miners moving overseas, with Central Asia, North America, and Paraguay touted as potential new homes for their operations. Several large-scale mining firms are <a href="https://technode.com/2021/05/24/crypto-mining-moves-to-north-america-as-china-cracks-down/">considering</a> moving out from China and opening shops in the US or Canada. While nearby Asian countries make logistical sense, Bitcoin mining is a location-agnostic process that only requires a connection to the internet. <br /><br /><br /><br />

Bitcoin’s hash rate drops to a six-month low after China shuts nearly 90% of its bitcoin mining

<ul class="summary-list"><li><keyword id="12224692" type="UNKNOWN" weightage="60" keywordseo="fitch-ratings" source="Orion">Fitch Ratings</keyword> downgraded <keyword id="11931676" type="UNKNOWN" weightage="60" keywordseo="el-salvador" source="Orion">El Salvador</keyword>'s credit further into junk territory in light of its <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> adoption. </li><li>The ratings agency also cited an $800 million bond due next year and increased reliance on short-term debt.</li></ul><p>El Salvador received a credit downgrade due in part to its bitcoin adoption and crypto-loving president.</p><p>In a <a href="https://www.fitchratings.com/research/sovereigns/fitch-downgrades-el-salvador-long-term-idr-to-ccc-from-b-09-02-2022#:~:text=from%20'B%2D'-,Fitch%20Downgrades%20El%20Salvador's%20Long%2DTerm%20IDR,'CCC'%20from%20'B%2D'&amp;text=Fitch%20Ratings%20%2D%20New%20York%20%2D%2009,of%20this%20rating%20action%20commentary.">Wednesday report</a>, <keyword id="12268369" type="UNKNOWN" weightage="60" keywordseo="fitch" source="Orion">Fitch</keyword> Ratings cut the Central American country's credit rating to CCC from B-, putting El Salvador's debt further into junk, a term referring to a lower-than-investment-grade status.</p><p>Besides the country's <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> adoption, the ratings agency said its downgrade reflects increased reliance on short-term debt, an $800 million bond payment due next January, and limited ability to obtain other financing. </p><p>El Salvador made bitcoin a <a href="https://markets.businessinsider.com/news/currencies/bitcoin-outlook-el-salvador-president-nayib-bukele-100000-price-100k-2022-1?utm_medium=ingest&amp;utm_source=markets">form of legal tender</a> in September and announced in November it would launch a $1 billion, 10-year <a href="https://markets.businessinsider.com/news/currencies/el-salvador-bitcoin-bond-special-dividend-bitcoin-city-president-bukele-2021-11?utm_medium=ingest&amp;utm_source=markets">bitcoin bond</a> via Blockstream. While the country has grown in popularity for its embrace of bitcoin, ratings agencies have been less enthused.</p><p>Fitch's downgrade follows a similar move from Moody's last year and a warning last month that the country's default risk would increase if it keeps up its bitcoin buying spree. President <keyword id="11931679" type="UNKNOWN" weightage="60" keywordseo="nayib-bukele" source="Orion">Nayib Bukele</keyword>, who has been known to buy bitcoin on his phone with public funds, responded on Twitter to say, in a slang term, that the country <a href="https://markets.businessinsider.com/news/currencies/el-salvador-president-tweet-dgaf-nayib-bukele-moodys-downgrade-bitcoin-2022-1">doesn't care</a>. </p><p>In its report, Fitch said "weakening of institutions and concentration of power in the presidency have increased policy unpredictability, and the adoption of bitcoin as legal tender has added uncertainty about the potential for an IMF program that would unlock financing for 2022-2023."</p><p>A previous analysis by Bloomberg found El Salvador has about 1,391 bitcoins in its coffers and may have lost an estimated $10 million amid the bitcoin rout this year. As the market slumped in January, <a href="https://twitter.com/PeterSchiff/status/1484664429988159490">Bukele said</a> he "bought the dip," adding 410 bitcoins to El Salvador's stash for $15 million. </p>

El Salvador's bitcoin adoption and its crypto-loving President Nayib Bukele contribute to country's credit downgrade at Fitch

<ul class="summary-list"><li>El Salvador yanks a feature on its Chivo network that people were illegally using to profit from <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> trades, Bloomberg reported. </li><li>The price-freezing feature gave users time to check bitcoin rates on other exchanges and decide whether to buy or sell. </li><li>Users said the Chivo wallet is now restricting trades to one every three minutes.</li></ul><p>El Salvador has taken away a pricing feature on its Chivo <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a> network that people were illegally using to profit quickly from transactions with the cryptocurrency, <a href="https://www.bloomberg.com/news/articles/2021-10-25/el-salvador-s-bitcoin-speculators-are-stifled-in-chivo-crackdown?sref=GUP2BhaG">according to a Bloomberg report</a>. </p><p>Chivo no longer freezes bitcoin's price for one minute before confirming a trade. The feature gave users time to check bitcoin pricing on other cryptocurrency exchanges and decide whether to buy or sell, an activity called scalping. </p><p>"Unfortunately many of our users used it for scalping, which is legal but without the option of having a frozen rate," <a href="https://twitter.com/chivowallet/status/1450190995581292552">according to a translated Twitter post from Chivo</a>. "Doing it with a frozen rate, comparing it with other exchanges in real time is a type of fraud." </p><p>El Salvador in September became the first country in the world to allow bitcoin as a payment option and, with that, rolled out its Chivo crypto wallet.</p><p>With last week's change in the pricing feature, users said the wallet is now restricting trades to one every three minutes and that the price at which they sell bitcoin isn't the rate they receive when a transaction is approved, the report published Monday said. </p><p>A programmer in El Salvador who has closely tracked the Chivo rollout said it's unclear if the price difference is a fee for using the wallet, a spread charged by Chivo, or the result of price swings during the three-minute delay. </p><p>Bitcoin during Monday's session rose 4% to $62,967.52. Last week, the world's most-traded cryptocurrency reached an all-time high of $66,930.39, <a href="https://coinmarketcap.com/currencies/bitcoin/">according to CoinMarketCap</a>, a day after the<a href="https://markets.businessinsider.com/news/currencies/bitcoin-futures-etf-cryptocurrencies-stocks-funds-markets-experts-sec-2021-10"> first bitcoin-futures ETF</a> launched. </p>

El Salvador removes bitcoin pricing feature scalpers were exploiting on its Chivo system

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/568d1bd3c08a8037018b735c-1183/screen shot 2016-01-06 at 8.50.25 am.png" alt="poker" data-mce-source="Reuters/Tiffany Brown" data-mce-caption="Jamie Gold of Malibu, California becomes the new World Series of Poker champion, winning $12 million in Las Vegas, Nevada August 11, 2006."><p class="source"><span>Reuters/Tiffany Brown</span></p><p class="caption">Jamie Gold of Malibu, California becomes the new World Series of Poker champion, winning $12 million in Las Vegas, Nevada August 11, 2006.</p></img></div><p></p></div></div>Want to invest in <a href="http://www.businessinsider.com/bitcoin-price-taking-off-after-one-of-chinas-biggest-exchanges-resumes-withdrawals-2017-6">bitcoin</a> but don't know where to start? There's an exchange-traded fund for you.</p><p>But wait, there's a catch: the ETF shares are double the price of the cryptocurrency itself.</p><p>In order to buy the <a href="https://grayscale.co/bitcoin-investment-trust/">Bitcoin Investment Trust</a> (GBTC), provided by Grayscale Investments, investors have to pay a 106% premium to the actual bitcoin rate, according to data from financial analytics firm <a href="https://www.s3partners.net/">S3 Partners</a>.</p><p>While that may seem like a steep price to pay, consider that the ETF surged 248% in May, more than three times the 72% increase for the bitcoin-US dollar currency cross. Still, that degree of outperformance is relatively anomalous, with actual bitcoin beating the fund in two of the prior three months. </p><p>So why does the GBTC ETF command such a lofty premium? It's simple supply and demand. As bitcoin demand has grown exponentially, the fund's shares outstanding have remained around 1.7 million since its inception in 2015. Don't expect that to change.</p><p>"With the operational risk of buying and holding actual bitcoins to support ETF creation very high, and difficult and expensive to insure, it is unlikely that GBTC's outstanding share amount will climb above 1.7 million anytime soon," said Ihor Dusaniwsky, the firm's head of research.</p><p>The lack of new shares makes it very difficult for bearish bitcoin speculators to actively short the ETF, simply because there are so few units available to borrow. And the ones that are available can be prohibitively expensive. This creates a situation where expanding bitcoin premiums can go unchecked, aided by a lack of downward selling pressure, according to S3.</p><p>However, it's important to note that paying a lofty premium for the GBTC ETF can also be a money-losing proposition, even if an investor makes a correct bet on the direction of bitcoin. Once demand for the fund starts to wane, the current 106% premium will start to collapse, making it difficult for new buyers to sell out of positions at a profit.</p><p>But the ETF wasn't always this expensive. Prior to the recent spike in bitcoin, the fund traded at an average premium of 10% during 2017. It's only gotten so stretched since demand started exploding in May.</p><p>With all this considered, the final question becomes: is there any way to wager on the decline of this GBTC ETF premium? Not unless you're willing to shell out, according to Dusaniwsky.</p><p>"There are a substantial amount of potential profits to be made as the premium eventually erodes," he said. "Unfortunately, today there is no way to get into this trade in size."</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/593010df79474ccf008b5c49-650/screen shot 2017-06-01 at 90355 am.png" alt="GBTC ETF premium" data-mce-source="S3 Partners" data-link="https://www.s3partners.net/"><p class="source"><span><a href="https://www.s3partners.net/">S3 Partners</a></span></p></img></div><p></p></div></div></p><p class="tagline">Get the latest Bitcoin price<a href="http://markets.businessinsider.com/currencies/BTC-USD"> here.</a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/explosion-ariana-grande-concert-manchester-arena-concert-suicide-bomber-terror-attack-2017-5">This is the aftermath of a bomb explosion at the Ariana Grande concert in Manchester</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="o0MzhiYjE6KPtWZg-6MMDTGt6H8J7mKs" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'o0MzhiYjE6KPtWZg-6MMDTGt6H8J7mKs',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

You Searched For "bitcoin rate" and got 4 results

Bitcoin’s hash rate drops to a six-month low after China shuts nearly 90% of its bitcoin mining

Shivam Vahia

El Salvador's bitcoin adoption and its crypto-loving President Nayib Bukele contribute to country's credit downgrade at Fitch

Natasha Dailey

El Salvador removes bitcoin pricing feature scalpers were exploiting on its Chivo system

Carla Mozée

There's an easy way to bet on bitcoin - but it'll cost you

Joe Ciolli