China's decision to shut down Bitcoin mines throughout its provinces could make the U.S. the new leading contributor to the cryptocurrency's hash rate, CNBC said, especially if miners seeking cheap energy and privacy laws flock to the country.
The Cambridge Centre for Alternative Finance (CCAF) revealed earlier this month that "China’s share of total Bitcoin mining power declined from 75.5% in September 2019 to 46% in April 2021," which was before the country started to crack down on crypto, allowing the U.S. to rise to second place as its share increased from 4.1% to 16.8%.
CCAF said it wasn't sure where Bitcoin mining operations shut down by the Chinese government would go, but multiple executives at cryptocurrency-related companies told CNBC that it would make sense for miners to move to the U.S. because of the ready supply of cheap energy and the relative stability of the country's regulations.
CNBC said "the U.S. is also home to some of the cheapest sources of energy on the planet, many of which tend to be renewable." Data provided by Statista indicates that the U.S. electricity prices aren't the lowest in the world—that distinction appears to belong to Iran—but they're much lower than they are in other regions.
The push for renewable energy was also said to make the U.S. a compelling destination for China's outcast Bitcoin miners. Efforts to mine cryptocurrency using hydroelectric, nuclear, and other clean energy sources could help mitigate some of the criticism regarding the amount of power these operations rely upon.
But that's only part of what makes the U.S. a compelling destination for Bitcoin miners, CNBC reported. The freedoms and protections afforded by American regulations—such as they are—could also appeal to Chinese mining operators looking to relocate somewhere that probably won't just kick them out again.
“If you’re looking to relocate hundreds of millions of dollars of miners out of China, you want to make sure you have geographic, political, and jurisdictional stability," Blockcap founder Darin Feinstein told CNBC. "You also want to make sure there are private property right protections for the assets that you are relocating.”
There's already evidence that Chinese miners are moving to the U.S. Bit Digital announced on July 13 that it "accelerated its migration program to North America, and anticipates completing migration of its remaining China-based fleet during the third quarter of 2021," for example. (It also has some operations in Canada.)
The Washington Post reported that other Chinese mining operations are considering moves to the U.S. as well. Some, like BIT Mining, have raised funds to move outside China without specifying their destination. But so far the consensus seems to be that the U.S. will be the leading destination for these miners as they look for a new home.