The Chinese government is currently considering banning cryptocurrency mining and subsequently shutting down mining facilities. However, cryptocurrency enthusiasts believe this is the best time to invest in crypto mining hardware as the market tends to perform well after China bans a product. In fact, a famous saying by Fred Wilson in 2014 is now making the rounds on social media following recommendations that the Chinese government should ban crypto mining activities in the country.
China Could Ban Crypto Mining
The National Development and Reform Commission (NDRC), which is China’s primary economic planning body published an article on April 8, suggesting to the government that cryptocurrency mining should be banned. The government body looked into industries that are considered suitable for the economy and those that should be eliminated, categorizing crypto mining amongst the latter.
The eliminated industries including cryptocurrency mining are those the agency considers to be a waste of resources and might not have a meaningful impact in the future. The fact that crypto mining consumes a lot of energy has been the primary talking point amongst media houses in China, with reports of authorities seizing mining farms and equipment due to abnormal electricity consumption, and thus threatening the smooth running of power grids in the country.
If China Bans, You Invest
In 2014, Fred Wilson of Union Square Ventures, pointed out that the lesson from the internet is that anything that China bans, invest in it. The quote has now become popular amongst cryptocurrency enthusiasts as they believe that despite the sanctions placed on crypto activities in China, Bitcoin and others would continue to perform excellently.
Adding to their optimism was Changpeng Zhao, the CEO of Binance, tweeting a picture of Bitcoin’s chart months after the Chinese government banned ICOs in the country in 2017. The BTC price rallied to its all-time high within three months of China’s ICO ban, with Zhao asking what the picture means. The statement by Fred Wilson was quoted by another cryptocurrency user.
With the BTC price rallying following the ICO ban in China, it could be an indication that this is the best time to invest in cryptocurrency mining hardware. The Chinese miners would be looking to move their operations to other favorable countries, and this could lead to an increase in demand for the mining hardware. By investing in the crypto mining hardware space now, investors could be able to make a profit as the market for the gears would increase and the prices along with it.
Will Bitcoin Prices Surge?
Despite the latest news from China, most of the cryptocurrency community is optimistic that BTC price could attempt the $6,000 mark very soon. They believe that the entire point of crypto is to break away from the hold of countries like China and by this move, crypto could become decentralized again.
China houses some of the largest mining rigs and farms in the world, and the enactment of the ban could see the miners move to other countries with cheaper electricity tariffs. Some analysts believe that the spread of mining farms would make the entire process decentralized, unlike now that the activity is heavily concentrated in China.
It is yet to be seen if the government would adopt the recommendations. However, it is still an excellent time to invest in crypto mining equipment.