Crypto mining's upcoming ban in Inner Mongolia may help explain Bitcoin's recent resurgence
Inner Mongolia is often associated with cheap energy, thanks to a profusion of coal mines. Therefore, it is currently extremely attractive to industries that can benefit from the same, crypto-mining included. However, the region would apparently rather prioritize other more traditional concerns such as metal-smelting instead, as it now reportedly plans to make all digital coin production within its jurisdiction illegal.
The region is currently associated with an estimated 8% of all Bitcoin production worldwide, thus inextricably also contributing to all the electricity consumed by this activity worldwide. According to the latest analysis conducted at Cambridge University, 65% of that power was used in China.
The autonomous region would clearly rather things were otherwise, however. Its new measures, intended to cut its domestic energy consumption by approximatey 1.9% by the end of 2021, may already have had an effect on the cryptocurrency markets: Bitcoin, for example, has now rebounded above US$48,000, whereas it had previously been exhibiting a slight downward trend in February 2021.