The founder of Grayscale Investments has observed movements for 3 months. China currently controls much of the processing power of the network.
Barry Silbert, Founder of one of the world’s largest cryptocurrency management companies, said last February 18th that he noticed efforts to move the production of Bitcoin from China, which currently dominates cryptocurrency mining, to North America.
The founder of Grayscale Investments, which is based in New York, observed whilst delivering an online presentation to some investors, without explaining why the transfer might be taking place.
Many of the major investors, among which are pension funds and asset managers, have been reluctant to adopt Bitcoin (BTC), concerned about its volatility, security breaches and lack of transparency in the markets.
However, it is important to note that Bitcoin is strongly favored by enthusiasts and retail investors. Since it was created, more than a decade ago, it has gained increasing interest from risk funds and business companies. Many people are attracted by its potential for high returns in an era when there are very low-interest rates.
For their part, the miners from China control about two-thirds of the processing power of the cryptocurrency network, according to research studies conducted last year. This dominance has allowed Chinese miners to produce a greater number of cryptocurrencies and has also fueled the demand for mining equipment produced in the country.
In that regard, Silbert stated that what he has seen in the last three to six months is a real growing change that has been moving much of that mining activity out of China, specifically to Canada and the USA.
Mining Farms Earn Cryptocurrencies
Bitcoin farms are usually firms that handle large groups of high-power computers connected to cheap and abundant electricity. It should be highlighted that they compete with each other on the Bitcoin network to solve complex mathematical puzzles and earn new cryptocurrencies.
Last February 18th, the price of Bitcoin was about USD 10,300, while miners recorded annual earnings from the production of bitcoins for a value of USD 6.7 billion.
Profit activity usually takes place in cold climates or sparsely populated areas. The Chinese firm Bitmain has become one of the largest miners and manufacturers of Bitcoin mining equipment on a global scale. Another manufacturer, Canaan (CAN.O), launched an initial public offering (IPO) last November but received a little enthusiastic response from investors.
The cryptocurrency management company Grayscale, which supervises around USD 3.1 billion in cryptocurrencies, has struggled to attract large investors to the sector of cryptocurrencies.
Last January, it became the first cryptocurrency investment vehicle to reach the status of a reporting company with the United States Securities and Exchange Commission (SEC). This means that its cryptocurrency products are subject to the same regulations as the products traded in the main exchanges.
Despite major investors’ reluctance to adopt Bitcoin, this cryptocurrency is strongly favored by enthusiasts and retail investors for its potential for high returns. Besides, the fact of reaching about USD 10,300 and rendering USD 6.7 billion to miners in recent days proves that it is still the best investment option.
By Alexander Salazar