Alex Brammer, vice president of business development at U.S. cryptocurrency company Luxor Tech, reports that calls from Chinese miners bombarded him within hours of the May 21 speech. “We have received calls from very large miners trying to find collocation space energy across North America,” he says. “We had calls and were asked: ‘Can you fit 20,000 machines in 14 days?’, For example. The tone in the industry was just very hectic. “
“Anecdotally, I would say that many, many [miners] will be leaving China in the next 30 to 60 or 90 days, ”adds Brammer.
Non-Chinese entrepreneurs could be the first to raise sticks, says Van Kirk of Kaboomracks. “We have customers that are hosted in China but are western customers looking for capacity outside of China,” he says. “You are looking for something in the USA or Canada.”
Not only North America is in demand as a potential travel destination. Parts of Northern Europe and Latin America are also considered; In general, says Brammer, some Chinese want to move their business to a location “that is politically stable, that has strong property rights, that has an established and reasonably stable regulatory framework.” However, the USA, which is already the second largest country for Bitcoin mining worldwide, could prove to be particularly attractive.
That’s not to say that moving will be easy. Logistically, says Brammer, it’s quite a nightmare to move tens of thousands of machines from China to the US, especially amid a global pandemic, the one Lack of shipping containers, and a latent trade war that calls for a payment from any company that wants to move goods from China to the US 25 percent tariff. Even after the mining machines have been unloaded from private cargo planes or container ships, setting up a new mining operation in North America will still take some time. “Some of them [Chinese miners] come in and say, ‘We want to buy 500 megawatts of capacity,’ and there are these North American power plants and mining farms that say, ‘We just don’t have that,’ ”says,” Brammer. He estimates the timeframe to build a large mining farm from scratch to be around 12 to 24 months.
Edward Evenson, director of business development at Bitcoin mining company Braiins, is more optimistic. He says that most major miners will only be supplying new machines from manufacturers in China and that they will have the resources to do this relatively quickly. “Smaller miners may not have the resources or connections that they will likely have to sell their machines,” says Evenson. “But the larger operations will simply move their machines to more stable mining environments.”
The big question, however, is whether the panicked calls will result in a real exodus. In fact, most of the Chinese miners are currently waiting for the government’s next move. “Chinese miners, who we have observed to have a higher risk tolerance than Western miners, are largely waiting,” says Ian Wittkopp, vice president of Beijing-based venture capital company Sino Global Capital. “Most Chinese miners have seen similar news cycles in the past. The cost of migrating to a new location can be high. We assume that most miners will wait for more clarity on the regulation before moving. “
This is not the first time China has waved its fist on Bitcoin; but this harsh demeanor has never really drowned the country’s thriving bitcoin industry. “Whenever the price of Bitcoin has shot up and there is a lot of speculative mania, the government makes one of these announcements,” says Evenson. “They have done it essentially every year or about every other year since 2013.”