In May, China announced a crackdown on Bitcoin trading and mining. This forced many crypto miners to flee to Texas, which is quickly becoming the new crypto capital.
Kevin Pan, CEO of the world’s second largest bitcoin mining network Poolin, moved there the very next day after the announcement. He vowed never to return.
The government crackdown caused bitcoin prices to plummet and hit miners unexpectedly. Prior to this, China hosted about 70% of the world’s mining power.
The “refugees” are now urgently seeking refuge in North America, Russia or Kazakhstan. Fast action is key, because time is money in bitcoin mining.
Bitcoin mining takes a lot of energy
Kevin Pan and his team are among the many “mining refugees” who have found a home in Austin, Texas. Some are now calling this the “Great Mining Migration.”
Bitcoin is a digital currency that exists only online: a virtual coin with no physical form. Bitcoin miners earn the digital currency by running (powerful) computers.
And that takes a lot of energy. So at the top of the list for bitcoin miners are:
- Cheap electricity (to run the computers for hours).
- Relaxed crypto laws
Texas can offer both.
The next global hub for bitcoin mining.
In addition to juicy barbecues and sprawling shooting ranges, Texas also offers legal protections for businesses. That’s a major incentive for bitcoin mining companies.
Here’s what paves the way for crypto companies to locate in Texas:
First, Texas Governor Greg Abbott supports cryptocurrency. He even tweeted about it in June.
Second, Texas recently became the second US state (after Wyoming) to recognize blockchain and cryptocurrency in its commerce laws.
China’s miners see excellent stability and opportunities in Texas. Shenzhen-based BIT Mining is one example. It plans to build a $26 million data center in Texas.
Beijing-based Bitmain is also looking to expand its anlage in Rockdale, Texas. This will make the small town a new center for bitcoin mining.
Texas takes its freedom and rights seriously. So do bitcoin miners. This fundamental connection makes the state perfect for bitcoin mining.
According to experts, China’s crackdown is because the crypto industry became too powerful. It had impressive control over financial markets. And that posed a threat.
By migrating to the US, bitcoin miners now have access to a thriving and innovative community. The US is gaining new talent and innovative projects. A win-win situation for both sides!