New Chinese Crypto Mining Firms Are Now Leaving
The Chinese cryptocurrency mining exodus shows no signs of slowing down, as two Chinese US-listed companies that just a few months ago turned into cryptocurrency miners this week announced their intends to “expand” overseas amid the country’s intensified crackdown on the sector.
The9 Limited, a Nasdaq-listed online gaming operator who pivoted his business to cryptocurrency mining earlier this year, announced on Monday that it had signed a crypto mining hosting deal. -currencies through a wholly owned unit with BitRiver, a Russian cryptocurrency mining company.
The9 has entered into a two-year contract with BitRiver, in which the Russian company is expected to reserve 15 megawatts of electrical capacity for the deployment of The9’s Bitcoin mining machine. Moscow-based BitRiver uses excess hydro power to run data centers, and the facility designated for The9’s Bitcoin mining machines has an initial total power supply capacity of 300 megawatts.
Meanwhile, BIT Mining – a New York Stock Exchange listed company that a few months ago also became a big investor in crypto mining in China – announced that it had raised US $ 50 million in as part of a private placement with institutional and accredited anonymous investors to enable it to develop its activities abroad.
BIT Mining said it intended to use the net proceeds of the private placement to “acquire additional mining machinery, build new overseas data centers, expand its infrastructure and improve its working capital.”
The9 and BIT Mining were among the former Chinese unencrypted companies that pivoted their business to crypto mining earlier this year, while Bitcoin was still in its bull run. BIT Mining, formerly known as 500.com, operated online sports lottery services, but in February it announced the acquisition of two of China’s leading Bitcoin mining pools, BitDeer and BTC.com.
The9 stock closed down 3.25% at $ 11.02, while BIT Mining closed down 4.93% at $ 5.21 in the US market yesterday.
The moves by these crypto mining companies come as China continues to tighten the noose on its crypto mining sector. As late as today, a local media outlet in China’s eastern province of Anhui reported that the provincial government was planning to carry out a broad campaign to curb crypto mining activity.
Anhui’s squeeze on crypto mining would follow similar crackdowns elsewhere in China, including former Bitcoin mining hubs in Inner Mongolia, Xinjiang, Qinghai, Yunnan and Sichuan.
According to a report published in June in Global Times, a media outlet owned by the Communist Party of China, these regional bans have already succeeded in shutting down around 90% of China’s Bitcoin mining capacity.
In response, Chinese minors migrate to countries where they are less intrusive. Some of the top preferred destinations for displaced Chinese miners include Kazakhstan, North America and Northern Europe.
According to connoisseurs, Russia’s cold climate and cheap electricity could also make it a good location for Bitcoin mining, if not for the country’s ambivalent stance towards crypto.
“Russia’s natural environment is good for crypto mining because it is cold there and the country has abundant energy sources, which makes its electricity price relatively low,” crypto mining veteran , who asked not to be identified due to legal sensitivities surrounding the industry, told Forkast. News.
But Russia’s business environment for crypto seems less ideal. “The policy towards crypto mining is inconsistent,” the industry veteran said. “Many Chinese miners have suffered losses, and some have lost faith in Russia and would rather go further to explore other crypto mining sites.”
Wenguang Wang, head of the mining data center of BitDeer, a Chinese cryptocurrency mining company that was acquired earlier this year by BIT Mining, said Forkast. News that Chinese cryptocurrency mining companies listed in the United States were, to some extent, already familiar with global expansion, which made it easier for them to relocate their operations overseas.
“These Chinese companies held much of their hashrate in China, so their computing power has declined dramatically due to the recent crackdown in the country,” Wang said.
He thinks it’s a good sign that cryptocurrency mining companies are actively saving themselves, but he also thinks fleeing China blindly isn’t always the wisest decision.
“It might not necessarily be a profitable business, it can lose money,” Wang said. “I hope Chinese mining companies can save themselves, but they need to keep a calm mind. ”