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Bitcoin is starting the month with gains after hitting a speedbump last week, following reports that North China's Inner Mongolia Autonomous Region has banned cryptocurrency mining and will eliminate virtual currency mining by the end of April.
Last week was quite rough in the crypto markets as bitcoin, the world's largest cryptocurrency, gave away almost half of the year's gains in a frightening selloff. Today, however, the token spiked over 5 percent to $47,735 (N22,674,125) and is looks nicely poised for a new upward run.
North China's Inner Mongolia Autonomous Region is one of the areas with the most virtual currency mines, due to its cheap cost of electricity. Other parts of China, such as Southwest China's Yunnan Province and Sichuan Province, are also home to a concentrated number of virtual current mines. However, local governments in China are scrambling to control energy consumption and improve energy efficiency after President Xi Jinping pledged to achieve carbon neutrality before 2060.
This report now implies an increase in scarcity of the token, and an increase in demand as miners are now going to have to join the market bidding before they can own any more crypto-assets.
The fate of the virtual currencies mining industry has been hanging in the balance in China after the government banned initial coin offerings around mid-2017, leading to the shutdown of a number of bitcoin platforms in the country. Crypto token mining gradually flourished since 2013 when many digital currency mining companies came to China to take advantage of cheap cost in electricity, especially in some southwestern regions.