Cryptocurrency markets

Have Chinese miners found a home in Texas?

Have Chinese miners found a home in Texas?
Poolin, a major mining pool from China, went to America. Let's take a look at how much profit the U.S. companies made after eliminating their direct rivals.

Poolin, a major mining pool with significant operations in China, is actively moving its mining operations from China to the U.S., trying to move some of its executives to Austin, Texas.

As China intensifies its crackdown on crypto-mining, many miners have closed their operations in China and are moving to other places that seem more conducive to regulation and offer relatively cheap electricity.

While it's easy for large miners to cope with the move, for smaller businesses the regulatory measures have proven to be a killer.

Size matters

Small and medium-sized farms in China may face obstacles in relocating abroad because their representatives often do not speak English and do not really have enough capital or time to move outside of China.

Therefore, it will take some time to establish the full scale of the consequences, as many smaller miners have sold their machines or put them into storage while they consider the most acceptable options in terms of regulation and electricity prices.

However, some of the smaller mining farms seemed to continue to run small operations and advertised on Tieba, a Chinese online forum, about putting up machines. Some of them were also advertising in Kazakhstan.

Texas has become a cryptocurrency mining-friendly state. On June 5, Governor Greg Abbott announced legislation that would create a master plan to expand blockchain capabilities in Texas. Abbott described himself as a supporter of the cryptocurrency law proposal, saying:

"Cryptocurrency is increasingly being used for transactions and is starting to become mainstream as an investment. Texas should lead the way on this."

In May, BIT Mining announced it would invest $25.7 million in a cryptocurrency mining facility in Texas to build and operate with Dory Creek, a wholly owned subsidiary of Chinese cryptocurrency cloud mining platform BitDeer.

Poolin has also found its new home in the state.

Texas is very welcoming. They understand that if you have a certain amount of unused electricity and you plug it into a Bitcoin mining farm, the electricity will make money. And people need jobs.
Have Chinese miners found a home in Texas?

Have Chinese miners found a home in Texas?

Miners are slowly recovering.


Poolin is also looking at options across North America, and the company's top priority has been to find cheap electricity and monitor the environment with hydro or solar power.

Meanwhile, Bitcoin's global hash rate is trending upward as miners displaced by China move to friendlier shores and resume investing big money in mining equipment.

On Tuesday, the total hash rate was at 113.3 million tsh/sec, up from 8,479 million on July 3, which was the lowest since September 2019, according to data from Blockchain.com.

Starting in mid-May, shortly after China stepped up its crackdown on the sector, mining pools began receiving fewer newly mined bitcoins, with weekly volume dropping from about 10,000 BTC per week to less than 5,000, according to a research report recently released by Chainalysis.

Miners from other companies are performing strongly


Five publicly traded North American mining companies released 1,802 Bitcoins in July - an average of 58% more than in June.

Marathon Digital, Riot Blockchain, Argo Blockchain, Bitfarm and Hut8 experienced a fairly productive month in July, even though they did not significantly increase their hashing capacity, according to July production updates each miner released before Tuesday.

This was largely because the Bitcoin network witnessed its biggest drop in mining complexity last month.

While every Bitcoin mining operation outside of China that has not been shut down is expected to get a bigger share of the daily BTC mining pie, updates from five publicly traded companies offer a look at exactly how much they have benefited from shutting down their Chinese rivals.
The table below shows the number of Bitcoins mined for the month based on financial disclosure and their growth from the previous month.

Nasdaq-listed Marathon and Riot Blockchain recorded growth of more than 50% among these five, though they barely expanded their mining fleet in July compared to operations in June.

As of July 30, Marathon had about 19,000 units of the latest generation of Bitcoin - ASIC miners - the same number as it had as of June 30. Riot also said that the installation of the recently received equipment has expanded due to infrastructure upgrades.

"Largely due to favorable changes in global hashing rates, July was an extremely productive month for our mining operations," Marathon CEO Fred Thiel said in a statement.

In a similar note, Peter Wall, CEO of Argo, which is listed in London, attributed the July increase to the fact that his firm "was able to benefit from lower global hashing rates and mining complexity." Argo's mining fleet is based at its facilities in Canada, and it is also applying to list on the Nasdaq.
On the other hand, Canada-listed Bitfarm noted that recent macroeconomic developments in China have allowed it to "accumulate more Bitcoin on its balance sheet than previously thought."   

But not all U.S.-listed Bitcoin mining companies have made the most of China's policy changes.

BIT Mining, BIT Digital and The9 City, which previously mined in China, have been hit hard and are planning to ship machines to regions such as Kazakhstan, Russia and the U.S.

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