Ethereum struggles below $3K as China crackdown shuts 4th largest ETH mining pool

Ethereum (ETH) looks poised to blast towards $4K; three reasons why
“Ethereum printed on an old typewriter” by wuestenigel is licensed under CC BY 2.0

Key Takeaways

  • BeePool, the fourth-largest Ethereum (ETH) mining pool has announced its exit from China
  • A day before the announcment, SparkPool, the second largest Ethereum mining company also left China
  • Ethereum’s native token, the ETH continues to struggle bellow $3K

YEREVAN (CoinChapter.com) — China-based BeePool, the fourth-largest Ethereum (ETH) mining pool in terms of hashrate, is the latest to exit the country. The company fell victim to the latest intensified Chinese crackdown on the crypto industry.

For clarity, a hashrate donates the speed at which a cryptocurrency mining device operates or the speed of mining crypto. 

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China shows mega Ethereum miner the door

According to the announcement issued by BeePool, the company will leave China “in response to the latest regulatory policies” issued by the Chinese authorities. 

Last week, the Chinese authorities reinforced the crackdown on the crypto industry. In an updated circular that created havoc in the market, the People’s Bank of China (PBoC) made all transactions in cryptocurrency illegal. Not only mining but also any transaction in cryptos is now banned in China. 

The circular also forbade international exchanges from providing services to Chinese citizens online. 

The markets reacted sharply at the announcement, causing prices to fall. Bitcoin (BTC) dropped up to $4K while Ethereum (ETH) shed over 13%.

BeePool’s exit comes in the wake of the new crackdowns.

To facilitate the exit, the company announced it has stopped accepting new registrations. Additionally, all mining access servers have stopped operating at 23:59 on October 15, 2021, Beijing time.

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Ethereum becomes China’s new target

The price of Ethereum (ETH) continues to hover below $3000 as 4th largest mining pool in the world, BeePool, exits China amid crackdown.
Top 25 miners by blocks. Credit: Etherscan

BeePool’s exit after 4 years of operation indicates the Chinese authorities have shifted their focus from Bitcoin (BTC) to Ethereum (ETH).

After battling to eliminate Bitcoin mining from the country, the Chinese authorities are going after Ethereum miners. In an attempt to show that they mean business, authorities are now tracking down illegal ETH miners. 

Despite the ban, in some districts of China, Ethereum mines continued to operate illegally. 

Days back, officials in Inner Mongolia confiscated more than 10,000 ETH mining equipment as a sign of increased clampdown. 

A day before BeePool announced its exit from China, another Ethereum mining giant left the country.

Sparkpool, the second-largest ETH mining pool suspended operations in the country owing to similar reasons. Established in 2018, Sparkpool grew to compete with the largest Ethereum mining pool Ethermine. 

Other than mining pools, some crypto exchanges also suspended operations in China. Binance and Huobi, for example, announced that they will no longer cater to China-based users. 

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Ethereum struggles below $3K

The price of Ethereum (ETH) continues to hover below $3000 as 4th largest mining pool in the world, BeePool, exits China amid crackdown.
ETHUSD on TradingView

Following the FUD caused by the Chinese crackdown, ETH has been struggling to recover. It trades at $2921, over 32% lower from its all-time high of $4,356.99.

As indicated by popular investor Lark Davis, there is a shortage of Ethereum in exchanges. With the price currently running low, people are reluctant to sell their ETH, hoping for larger profits in the future. 

Meanwhile, Ethereum has set the date of its Alter upgrade to October 27. With the blockchain’s final transition to proof-of-stake in sight, things might change for the better for ETH. 

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