Due to pressure from the current bitcoin prices and uncertainty surrounding the cryptocurrency regulation in China, bitcoin mining companies prefer to move their enterprises to more profitable jurisdictions.

According to the new report by TokenInsight, China is losing its leadership position in bitcoin mining. The report cites data from the Center for Alternative Finance at the University of Cambridge, according to which the share of Chinese miners in total energy consumption fell from 75.63% in September 2019 to 65.08% by the end of April 2020. The share of energy consumption of bitcoin miners located in the USA within the same period increased from 4.06% to 7.24%. A sharp increase in number of miners was also observed in Kazakhstan: if last September, Kazakhstan miners made up 1.42% of the bitcoin network hashrate, then by May 7 their share increased to 6.17%.

According to the chief analyst of TokenInsight Johnson Xu, China will continue to lose its previous leadership position in the bitcoin mining market. The May halving will contribute to this trend. According to Xu, the proportion of miners who turn off mining units due to a reduction in rewards among Chinese miners is significantly higher than the global average.

“China has a fair amount of older generation machines because there’s a limited incentive for miners to switch to the latest generation.” The main advantage of new mining machines is lower power consumption with higher performance. In China, electricity is cheaper than in many other countries, so miners were not so interested in buying energy-efficient, but expensive machines.

Xu suggests that some part of Chinese miners will leave their country and relocate their enterprises in other countries. The ambiguous position of the Chinese authorities in relation to the mining industry will also fuel this relocation motion.