Tuesday, 27 February 2024
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Bitcoin mining’s silent comeback in China, according to industry insider

Bitcoin mining's silent comeback in China, according to industry insider


CryptoSlate’s research analyst, James Van Straten, recently sat down with Bitfarms’ Chief Mining Officer, Ben Gagnon, to discuss the evolving landscape of Bitcoin mining, revealing some interesting thoughts on Bitcoin mining in China, along with detailed insights into global miner revenues.

Bitcoin and crypto going into 2024.

Gagnon shed light on the forthcoming Bitcoin halving event and its potential implications for mining operations. His prediction suggested significant industry shifts post-halving, stressing the need for enhanced efficiency and cost-effectiveness but remaining incredibly optimistic about halving economics.

“Just like with all previous halvings, BTC is rising in price leading into the few months before a halving but we’ve never seen hash price this strong going into a halving before.”

The potential of a Bitcoin ETF and its implications for market dynamics driving Bitcoin price was also discussed. Despite rumors of BlackRock’s involvement with Bitcoin mining companies, Gagnon doubted their direct interactions with miners for ETF purposes. Instead, he suggested the investment management firm would likely work with OTC desks for large-scale acquisitions.

“I do think Blackrock is probably accumulating. I think lots of people are probably accumulating in anticipation of an ETF, but there’s no reason to do that through a miner. They’ll just go directly to OTC desks.”

The pair also discussed the escalating miner fees within the Bitcoin network, another significant driver of mining economics. These fees have elevated to levels unseen since May, indicating a considerable increase. This rise in miner fees is considered a positive development for the industry, contributing nearly 10% of all mining revenue now. This is especially important given the coming Bitcoin halving event.

The fee surge, a revenue component for miners unaffected by the halving, could potentially strengthen mining economics post-halving by up to 20% if current trends continue.

Bitcoin mining in China.

Gagnon also discussed the possible impact of Canada’s vast underutilized natural resources on the industry and touched upon the global dispersion of Bitcoin mining, highlighting the emergence of new mining markets, including China.

Gagnon, who spent time operating crypto-mining facilities in China, shared his unique perspective on the country’s mining ban and the recent expansion of Bitcoin mining in the nation. Contrary to attributing the ban to environmental…

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