Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Bitcoin's recovery is in question as miners search for the exits

Bitcoin's recovery is in question as miners search for the exits

Bitcoin has slumped to pre-February levels after investors became spooked by China's crypto crackdown. How much damage is it likely to suffer?

Cryptocurrencies fought to find a foothold on Monday after cheerleading from Tesla boss Elon Musk at the weekend seemed unable to offset pressure from spooked investors amid a crackdown on the asset class in China.

Musk had lent a bid on Saturday by tweeting support for crypto in "the true battle" with fiat currencies.

But on Sunday, prices slumped as "miners" - those who mint crypto by verifying transactions - halted Chinese operations in the face of increasing scrutiny from authorities.


Bitcoin climbed as high as $35,970 (€29,459) from Sunday's trough at $31,107 (€25,473), but the growing sense of a shakeout flowing through the market left it struggling to make further gains.

It remains some 45 per cent below last month's record peak of $64.895 (€53,142).

The collapse leaves the world's biggest cryptocurrency back where it traded in February, before Tesla announced a $1.5 billion (€1.2 billion) investment in Bitcoin and made a since-reversed decision to accept it as payment for cars.

Rival cryptocurrency Ether hit an almost two-month low around $1,730 (€1,417) on Sunday and bounced as high as $2,101 (€1,720) on Monday before losing some steam. Dogecoin, launched as a parody before Musk's backing vaulted it up more than a hundredfold this year, last traded at $0.30 (€0.25).

"After a brief bounce off last week's multi-month lows, some of the paper-handed types have seemingly sold-out," said IG Markets' analyst Kyle Rodda, using the market term for short-term holders who sell at the first signs of trouble.

"Or (they) decided to pack it in and cut their losses as Bitcoin's momentum, and the speculative mania that drove it, almost entirely disappears," he said.

China begins its crackdown


The trigger for the initial crypto selloff appeared to come from a hardening stance from Chinese regulators last week, which stepped up further on Friday when a State Council committee in the country vowed to crack down on miners in particular.

Chinese miners currently account for some 70 per cent of the world's supply of Bitcoin.

"Many miners keep much of the bitcoin/ETH etc that they mine and don't hedge it all into fiat right away," said James Quinn, managing partner at Q9 Capital, a Hong Kong-based cryptocurrency private wealth manager.

"If they are pulling up stakes or shutting down, they may need to reduce their balance sheets in the short term".

Late on Sunday, Huobi Mall, part of cryptocurrency exchange Huobi, said on Monday it suspended crypto mining that services mainland Chinese clients. BTC.TOP, a crypto mining pool, has suspended its China business citing regulatory risks, while crypto miner HashCow said it would halt buying new Bitcoin "rigs".

Crypto miners use rigs - increasingly powerful, specially-designed computer equipment - to verify blockchain transactions in a process that produces newly-minted cryptocurrencies.

"Crypto mining consumes a lot of energy, which runs counter to China's carbon neutrality goals," said Chen Jiahe, chief investment officer of Beijing-based family office Novem Arcae Technologies.

The annual energy consumption of China's cryptocurrency miners is expected to peak in 2024 at about 297 terawatt-hours, greater than all the power consumption by Italy in 2016, according to a study recently published in the scientific journal Nature Communications.

Chinese President Xi Jinping has pledged carbon neutrality by 2060.

China has already lost its position as a global cryptocurrency trading centre after Beijing banned crypto exchanges in 2017.

"Eventually, China will lose crypto computing power to foreign markets as well," BTC.TOP founder Jiang wrote, predicting the rise of U.S. and European mining pools.

According to Chen, the crypto craze - if not curbed - could turn into froth similar to the Dutch tulipmania in the 17th century, which is often regarded as the first financial bubble in recorded history.

"The only difference is that after the tulip bubble burst, there were still some beautiful flowers left," said Chen.

"But when the virtual currency bubble bursts, what would be left are merely some computer codes".

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×