There is a controversial opinion that the first cryptocurrency is controlled by China. If this is true, the epidemic that is spreading in the country may change the value of digital money and its hashrate in the near future
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Chinese companies are leading in the production of mining equipment and mining Bitcoin. The two largest companies in the world, Bitmain and Canaan, are located in China. In total, according to various estimates, more than half of the computing power that is used to receive the first cryptocurrency can operate in this country.
Any news about quarantine, new bans or the spread of coronavirus can have an impact on the mining market. And this is already happening – in early February, the founder of a large pool of BTC.TOP Jiang Zhuyer said that police officers came to one of his large farms, demanding to suspend the production.
Zhuyer also reported problems with the return of employees to work due to the epidemic. In turn, the head of Canaan predicted a rise in price of new equipment in February-March and delays in its supply.
The disease began to spread in China in December, but so far the hashrate of the first cryptocurrency has not reacted to this event. Since the end of last year, the indicator has gradually increased, reaching in mid-January a new record high of 126 EH / s, now it is at 121 EH / s.
The cost of used equipment has declined altogether on the eve of the May halving, as after a twofold reduction in the block reward, it will become unusable. However, it makes no sense to buy such devices, as they will not be able to pay off in the next three months, and in the future they will only bring losses.
BitCluster founder Dmitry Kikin, in turn, is confident that so far the coronavirus has not affected the mining business in any way. The expert said that Bitmain ships equipment from Malaysia, the chips are made in Taiwan and Korea. Whatsminer has released a new model of equipment for cryptocurrency mining and is accepting orders for it in the normal mode.
“The only thing that was canceled is the profile events in China. So far we have not felt the problems associated with the development of the coronavirus epidemic. We hope for its early completion, ”Kikin added.
Bitfury Russia CEO Vadim Krutov is of a different opinion. According to him, most manufacturers whose factories are located in China have already temporarily stopped production due to an epidemic. If the situation develops, this will inevitably lead to at least delays in deliveries, and possibly to a shortage of equipment and an increase in its cost, the expert believes.
He stressed that the first signals testifying in favor of the risk of a deficit of miners are already being observed on the market. In such a situation, the hash network growth opportunities will be limited even with the growth of the Bitcoin exchange rate.
“If the situation worsens and the Chinese authorities are forced to take more serious steps that will entail shutting down mining farms, the hash rate and network complexity may even fall. If further growth of the Bitcoin exchange rate is superimposed on it, the profitability of mining can significantly increase, as well as equipment prices, ”the expert predicted.
The head of Exan.tech, Denis Voskvitsov, on the contrary, is sure that the coronavirus did not affect the work of the largest Chinese mining farms, and large farms are operating in the same mode. Voskvitsov explained that if they were closed, the hashrate of the BTC network would drop. But even if the situation with the disease worsens, and the farms really begin to close, other miners can compensate for the decrease in complexity, and this is unlikely to affect the Bitcoin exchange rate, the specialist is sure.
A similar opinion is shared by Sergey Troshin, CEO of Six Nines data center. He said that a possible drop in the hashrate in major currencies due to the shutdown of Chinese farms will lead to the fact that digital money will be easier to extract by about half, and the profitability of mining will increase by almost 100%.
“As a result, at first everyone will run to buy video cards and miners, and then the situation will stabilize. Further options are possible: either the price of coins will be adjusted, or mining capacities will gradually increase in other regions. The Chinese with their equipment are already moving to other countries, in particular, to Sweden. Relatively speaking, in three months the hash rate will normalize, but at this time increased volatility may appear on the market, ”Troshin said.
Most mining experts claim that so far the situation with the coronavirus has not affected the market in any way. However, if the epidemic continues to spread, it can lead to a sharp drop in the hashrate for a certain period of time and the situation will recover after several months. At the same time, halving will take place in May – the reward for the mined block will be halved, which means that the blockchain industry will face a new shock.
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