The 'Greening' Of Bitcoin: Will China's Forced Mining Exodus Crush Anti-ESG Case?

China's crackdown on crypto may have a silver lining after all.

While Beijing's bitcoin battering efforts - for myriad reasons including a lack of centralized control (translation: use our CBDC or else), a pathway for capital outflows (translation: use our CBDC or else), and the latest somewhat humorous "crypto does not meet China's carbon goals" - have, along with Elon's tweets, tamped down enthusiasm for the cryptocurrency; the perhaps unintended consequence of the actions of Musk (reversing his advocate position by highlighting the anti-ESG case) and China's regulatory crackdown (again) will be the 'greening' of crypto and inevitably enabling more progressive asset allocators to move reserves its way.

"In recent days, crypto-currency trading has been too hot in China which attracted many individual investors. It's necessary that the government rolls out warnings in case any large risks materialize," Cao Yin, managing director of Digital Renaissance Foundation and a bitcoin investor, said.

And it could be happening sooner than expected as China's Global Times (broadly considered Beijing's mouthpiece) reports that China's recent ban on bitcoin-related activity will reshape the landscape of the global mining industry and force more Chinese miners to migrate overseas, such as to the US.

"Chinese miners account for over half of the global crypto network's processing power, and this will also weigh on the development of the global mining industry in the long run," the insider said. 

Some bitcoin mines use thermal power sources that can't pass the government's environmental impact assessments, and thus run counter to the country's carbon-neutrality goals, Cao said.

But, as Global Times writes, according to Cao, some bitcoin mines in China are now ready to purchase carbon emissions quotas. The exodus started in 2017 but is now speeding up, as mines look for regions with cheaper electricity rates and more friendly policies.

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