Ethereum mining Hash rate to fall as China ban rolls out

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It's only been a week since China announced the full stance of their view on Cryptocurrency outlawing an entire sector and labelling all digital assets and currencies illegal.

The initial market dip caused by the announcement caused a slight 5% dip but recovered quickly. But as each day goes on we see further announcements from China based companies whom are either relocating or shutting down their businesses.

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At current we are aware that Huobi has locked new accounts from being created and has put a deadline in for when they will shut down their entire operation for mainland Chinese nationals. Huobi will close all accounts by the end of the year providing the opportunity for people to remove their funds or send them elsewhere Source.

Many exchanges have already ceased trading so this will provide a barrier for many Chinese nationals to access funds and transfer to fiat.

Sparkpool shutdown

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In further breaking news which will have significant impacts on Ethereum is the announcement by Sparkpool which is the second largest Ethereum mining venture providing services to not just Chinese nationals but also international investors has stated that they have effective immediately shut down all new account creations and that all further operations will be shut down by the end of this month.

Chinese nationals and international investors have days to remove their funds with no clarity on what will happen if investors are slow to act.

Binance has also suspended Chinese nationals from trading on their platform and the creation of new accounts from Chinese Nationals.

Alibaba removes mining equipment

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Further to the information about shut downs of exchange account Alibaba has announced that it will now no longer sell or supply mining equipment further expanding the ban on other IT equipment relating to cryptocurrency Source.

Based on new regulations and China's focus on companies many are cautious at what the CCP may do with the nation's economy beginning to crumble no one is taking any chances.

With Sparkpools shut down it will likely have a flow on effect to Ethereum but as we previously saw with Bitcoin mining firms shutting down this decreased the difficulty in mining Bitcoin and saw US and international mining firms increase their profits as the amount mined increased.

Sparkpools exit from the sector will no doubt create a similar phenomenon however, as Ethereum moves to PoS it is unclear if the exit from mining will only serve to speed the transition of PoS up.

Despite that, Ethereum has lost one of its largest miners which may likely impact ERC20 transactions over the next few weeks or months and potential increase fees as there is now less competition fighting to approve the transaction.

My thoughts are what is going to occur to the Chinese businesses shutting down that have Ethereum staked in PoS as there is no ability to unstake as Ethereum network has not provided this feature just yet.

This could potentially see a significant amount of Ethereum frozen on the network which would also continue to generate rewards for staking and further providing a deflationary token.

What are your thoughts?

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Obviously it's their way of removing crypto from their economy and cut down the ways for Chinese people to convert their yuan into other currencies. I have a feeling they believe it will make their control over the economy stronger and keep up the velocity of money higher there.

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Yes definitely, they will be trying to stop anything that takes money out of the county and forms USD. Their economic crisis is causing significant issues that require them to retain cash

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