(Another) China Mining Ban

Marty's Bent

Earlier today Blockspace Media reported on yet another bitcoin mining ban coming from the Chinese government. Specifically, the province of Xinjiang. According to Blockspace's sources, the province has ordered miners to shut down and enter an "extended inspection phase initiated by the central government" and it is likely that the machines that are entering this extended inspection phase won't be plugged back in locally. This would mean that anywhere from 400,000 to 500,000 high hashing machines will be unplugged and looking for new homes.

This is equivalent to 1.3 to 1.63 GW of energy draw, or 100-120 EH/s of bitcoin mining hashpower, which represents ~10% of the current network hashrate. A material amount for sure, but nothing more than a flesh wound compared to the impact of the 2021 China mining ban. I think this story should be read in context of the 2021 ban for those who may be worried.

At the time of the 2021 ban it was believed that 40-60% of network hashrate was operating within Chinese boarders, the total network hashrate was ~160 EH/s, and the United States had considerably more excess grid capacity than it does today. These three factors make this "ban" much different than the one we experienced in 2021.

It will be less impactful on the overall network because considerably less hashrate is concentrated in China today, and even less in the Xinjiang province.

The higher end of estimates for the amount of hashrate that is set to be turned off is only ~10% of the network hashrate. Whereas it would have been ~75% in 2021. The amount of hashrate that has joined the network since July 2021 is absolutely mind bending.

The United States has a much more competitive landscape for excess electricity due to the AI arms race that we are currently leaning into. AI hyperscalers are sucking up all of the excess electricity capacity as they are able to outbid bitcoin miners in most cases due to the overwhelming amount of capital that is dedicated to the arms race.

So this time around the existential fears should be considerably dulled, the amount of hashrate, while material, is not much in comparison to the hashrate that came off the network in 2021, and the United States may not be the largest benefactor of the exodus due to a different electricity supply-demand dynamic.

It's crazy how much has changed in a little over four years.

Bullish.

Bitcoin Native Companies Must Go Public Now or Be Displaced

The clock is ticking for Bitcoin-native companies to make their move into public markets. As Marty pointed out during the discussion, we're facing a critical inflection point where traditional financial giants are preparing to enter the Bitcoin space with overwhelming advantages. The window of opportunity for smaller, private Bitcoin companies is rapidly closing as these institutional players gear up for their 2025 market entry.

"Companies like Morgan Stanley and BNY Mellon will offer Bitcoin custody and lending products with superior cost of capital, making it nearly impossible for private Bitcoin companies to compete unless they scale up and go public immediately." - Ryan Gentry

Ryan Gentry emphasized the stark reality facing the industry: traditional banks will leverage their established infrastructure and lower cost of capital to offer Bitcoin services that private companies simply cannot match. The competitive landscape is about to shift dramatically, and only those Bitcoin-native firms that successfully transition to public markets will have the resources necessary to compete with these financial behemoths. The message is clear - act now or risk being displaced entirely.

Check out the full podcast here for more on regulatory capture, institutional Bitcoin adoption, and market timing strategies.

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