(Yicai Global) June 21 -- Sichuan province, regarded by many as the country’s last safe haven for China’s power-hungry Bitcoin miners, has become the latest province to bring the axe down on cryptocurrency mining projects following China’s warnings last month that it will not tolerate such virtual currencies.

Twenty-six big cryptocurrency mining farms in the southwestern province were closed down on June 20, according to the province’s development and reform commission. Local power suppliers have been told to identify and inform authorities of any suspected mining projects before June 25, it added.

This could be the final straw for China’s cryptocurrency mining sector, which accounts for around 75 percent of the world’s Bitcoin mining activities, following similar moves by authorities in the Inner Mongolia Autonomous Region and northwestern Qinghai province. Insiders had expected Sichuan to be more lenient on cryptominers as the province is rich in hydroelectrical power and the enormous power consumption by these mines is a huge source of income for these remote areas.

“The big mines have been closed, but the extent to which smaller mines have been affected is less clear,” an industry insider told Yicai Global. Local electricity suppliers reportedly cut off all power to mining farms from midnight yesterday, causing huge losses to those miners who had not transferred their digital assets beforehand.

China has long disapproved of cryptocurrencies, saying that they have no real value and their price can be manipulated, and outlawed all such trading back in 2017. Exchanges were able to circumvent these bans by registering overseas, but they ran out of rope last month when the Financial Stability and Development Committee of the State Council called for a crackdown on Bitcoin mining and trading to rein in risks.

Worldwide Repercussions

Since then, the price of Bitcoin has dwindled to USD35,622 apiece, nearly half the record high of USD65,000 reached in mid-April.

There has also been a big slump in demand for graphic cards. Miners bought about a quarter of the world’s graphic cards in the first quarter, worth USD500 million, according to market research firm Jon Peddie Research.

However, since the crackdown began, prices have started to fall. The price of the RTX 3090, for example, US chipmaker Nvidia’s most powerful consumer-grade graphics processing unit, has dropped by a third.

Crypto mining relies on banks of computers to generate strings of complex code based on an algorithm and is highly energy intense. A Bitcoin mine with 10,000 super computers can burn through 45 million kilowatt-hours of electricity in a month, Xinhua News Agency reported earlier.

The hashrate, or the combined computing power used to mine cryptocurrencies, has dropped significantly in the wake of the China ban. Bitcoin’s hashrate was 126.83 EH per second yesterday, a 36 percent drop from its all-time high of 197.61 EH per second on May 13.

Editors: Tang Shihua, Kim Taylor