Supply of electric power exceeds the demand of miners in China.
Due to the low demand of farm spaces for cryptocurrency mining in Sichuan, China, operators have had to reduce significantly the price of electricity in order to sell the available spaces more quickly.
In this way, the electricity supply currently exceeds the demand, as explained in an information published on the 8BTC portal on April 12. The note adds that even though in China it is normal for the price of electric power to fall during the rainy season, which starts in April and ends in October, this year is characterized by the little interest shown by the miners before the sales.
Sichuan Province is known as the capital of mining in China. There are estimated to operate more than 5 million platforms for cryptocurrency mining, although this figure has been decreasing for several reasons, including the floods that affected the area in 2018. Even so, the place is still an operations center important in China and the price of electricity is around 0.25 yuan / kWh (about USD 0.037 / kWh) during the rainy season, a figure lower than that of other provinces.
As a result, mining operators expected that 80% of the operators of farms in those other provinces with higher prices, such as Xinjiang and Inner Mongolia, would move to Sichuan. For this, they installed some 500,000 new spaces for sale and many of them settled in the area since last February, waiting for a larger number of buyers.
However, until now sales have not been as expected. As a result, some companies, such as Bitdeer, have decided to reduce the price by almost half, offering a “wet season combo” that brought the cost of electricity to an average of 0.22 yuan / kWh (USD 0.033 / kWh).
The low demand of spaces by the miners coincides with an increase in the bans that the Chinese government has been imposed on the sector since 2017. Among the new decisions is the inclusion of the mining of cryptoactives in a list of industries that are They want to eliminate. Recently it has been reported that many miners prefer to move to countries like Iran, although it also has restrictions.
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