Further Chinese restrictions on miners are depressing the Bitcoin rate. Even MicroStrategy’s renewed investment can do little to change that.
The crypto market is still on a downward trend. The total market capitalization fell by another 7 percent overnight. With a minus of around 5 percent, Bitcoin still recorded the smallest price loss among the top 10 most valuable cryptocurrencies. In a weekly comparison, however, with a share price decline of almost 20 percent, it looks much more bleak. At press time, BTC is trading at $ 31,834.
Above all, the Chinese government’s restrictive action against Bitcoin mining is repeatedly cited as a reason to explain the turbulence in the exchange rate of the cryptocurrency. For some time now, Beijing has been taking ever more rigorous action against digital mining in its own country. Several provincial governments have already imposed severe sanctions, primarily against miners who rely on climate-damaging energy sources in the prospecting process.
But now the ban seems to be extending to climate-neutral miners as well. So reported the news agency Reuters Last Saturday restrictions from the provincial government in Sichuan, one of the most important mining regions in China. Authorities asked energy suppliers to stop delivering electricity to the server farms. Sichuan is best known for the high reserves of hydro fuel within the crypto space.
Meanwhile, more and more miners are considering leaving China. As various media reports, the US states of Texas and the metropolis of Miami in particular are attracting miners. Now the circle of possible new mining hotspots is expanding to include Paraguay. According to speculation, the South American country could with the Itaipu Hydroelectric Dam (IHD), the second largest hydroelectric dam in the world, offer miners from Sichuan and Co. a worthwhile refuge.
The news from China is currently determining what is happening in the crypto space. Positive reports are in short supply and seem more like the famous drop in the ocean. It is roughly the same with the announcement from MicroStrategy (MSTR). The business intelligence company announced yesterday by Press release buying more Bitcoin. MicroStrategy stocked up on an additional 13,005 BTC, for which the company of crypto patron Michael Saylor spent around 500 million US dollars. MSTR now has a little over 105,000 Bitcoin in its treasury – a milestone. MicroStrategy now owns more than twice as much Bitcoin like Tesla. However, there were no major effects on the share price.
MicroStrategy previously had institutional investors for the fresh capital Senior Secured Notes offered a total of $ 400 million. The latest BTC purchase was made by MicroStrategy at a rate of 37,617 per bitcoin. So far, the company has spent $ 2.741 billion on the cryptocurrency – at an average price of $ 26,080. If the BTC rate can defend the psychologically important mark of USD 30,000, MicroStrategy’s investments will remain profitable.