US Surpasses China to Become World's Largest Bitcoin Mining Hub

Impact of Cheap Energy, Deregulation Expectations, and Advanced Mining Infrastructure
"China Losing Dominance in Mining Market... US Should Seize This Opportunity"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] As the Chinese government tightens regulations on cryptocurrencies, the United States has emerged as the world's largest Bitcoin mining hub for the first time, surpassing China.

CNBC and Bloomberg reported on the 13th (local time) that the U.S. has become the center of the global cryptocurrency mining industry.

According to the 'Bitcoin Mining Map' data from the Cambridge Centre for Alternative Finance (CCAF), as of July, the U.S. accounted for 35.4% of the global average monthly Bitcoin hash rate. This is the highest share held by a single country at that time.

The hash rate is an indicator used in the cryptocurrency industry to measure mining capacity, representing the speed at which cryptocurrency mining operations are conducted.

CNBC also reported that this represents a 428% increase compared to September of last year.

Kazakhstan ranked second with an 18.1% share, while China's share was 0.0%.

Until now, China had been the center of the cryptocurrency mining market. Since Bitcoin first appeared in 2009, miners flocked to China due to its low electricity costs.

However, starting earlier this year, the Chinese government implemented ultra-strict regulations banning all cryptocurrency-related products, transactions, and mining, prompting miners to begin fleeing China.

In fact, CNBC pointed out that in the first half of this year, when China’s regulatory measures were enforced, half of the world's Bitcoin miners ceased operations overnight.

As of May, China’s share was still 34.3%, significantly ahead of the U.S. at 21.8%.

In July of last year, China’s hash rate share reached 66.9%, while the U.S. accounted for only 4.2%, indicating a seismic shift in the mining market within just one year.

CNBC stated that through this data, the U.S. has officially become the largest cryptocurrency mining hub and noted, "The U.S. should partially thank China for the newly acquired dominance in the (cryptocurrency) mining industry."

Boaz Sobrado, a fintech data analyst in London, said, "The notion that China dominates Bitcoin is now completely broken."

The primary reason miners have migrated en masse to the U.S. is believed to be the low electricity costs. Some states, such as Texas, have some of the cheapest energy prices in the world.

The U.S. also has abundant relatively inexpensive renewable energy. Washington State is a haven for miners using hydroelectric power, and nuclear power generation is also widespread in the U.S.

Additionally, states like Texas have well-established infrastructure for mining. Furthermore, recent announcements by the U.S. Securities and Exchange Commission (SEC) that there will be no outright ban on cryptocurrencies and indications of regulatory easing have created a market-friendly policy environment, which is also cited as a factor attracting miners.