The bad news for investors with long positions is that Bitcoin price has crashed following the crackdown on crypto mining within China. However, for the miners in other regions, it is great news. As China kept imposing a crypto mining ban in more provinces, the hashrates for Bitcoin have gone down by 65%. Local miners are claiming that about 90% of all mining operations in the largest Asian country will go offline by the end of the month.
However, a new report published in CNBC reveals that this could be a blessing in disguise for crypto miners in other regions. VP of Foundry, Kevin Zhang, told the media that while many mining firms continue to go offline, the return and profit share for others increases. Hashrate indicates the processing power of Bitcoin. As per Zhang, mining becomes easier when hashrates are decreasing. He also claimed that since all miners participate in the same network and same economy, their proportional share of mining profits has lesser divisions.
Crypto Mining Firm Claims that Mining Revenue has Increased by 6.38%
Foundry is a commercial crypto mining enterprise headed by Kevin Zhang. Talking to CNBC about the current mining power cut down in China, he claimed that miners in other regions stand to get a raise of 6.38% in their revenue share. So, in layman’s terms, it can be said that there is lesser competition, and the division of revenue per participant has fattened up. Zhang also shared a detailed calculation on his Twitter account to prove the math.
It is important to assume that the energy supply is not inflated and miners have upgraded to the latest mining gears for this equation. His tweets also showcase that there is a weak correlation between the price points of the cryptocurrencies with their mining returns. In April, while Bitcoin price reached a historic ATH, the mining revenue went up by $35 per day. However, as the price has moved down about 40%, the mining returns have only gone down by 17%.
Miners in America and Other Regions are Happy with the Pleasant Bonus Increase in their Returns
The mining firms in other regions have started to feel the immediate impact of the crackdown in China. White Gibbs, the founder of a commercial mining farm, Compass, claims that it is expected that miners will be able to get a 35% higher return level since more provinces in China are outlawing cryptocurrencies. Another crypto miner Blockcap Chairperson Darin Feinstein, claims that both retail and commercial mining enterprises stand to profit from the prospect.
Blockcap is one of the largest mining facilities in North America. Feinstein further added that the gain is not only in terms of revenue stream. Advantages from DeFi space and energy conservation will also increase. Lesser mining farms mean better distribution of power grids.