Regulators apply more pressure to crypto industry, force prices down
China Market Watch: Bitcoin Mining Seems Unaffected by Coronavirus Outbreak
After a very long holiday, workers in China have returned to work. Businesses have been frozen for almost two weeks due to the government’s decision of extending the Lunar New Year holiday. In order to get the economy back on track, the Chinese government encourages companies to resume normal operations as soon as possible, despite the on-going city-wise lockdown in the worst-hit areas.
Tesla’s first overseas factory — Shanghai Gigafactory officially reopen this week, but Apple is still affected by the production halt of Foxconn, who aims to resume half of its production by the end of February. Apple’s production capacity will take some time to recover. It is worth noting that Wuhan and its vicinity, the center of the epidemic, are not only a big city with tens of millions of population, but also a key component in the global auto parts supply chain. As a result, the global auto industry is facing a crisis of production. Nissan announced that a factory in Japan plans to suspend production due to a shortage of spare parts. Previously, Korea-based Hyundai stopped some assembly lines.
The most damaged industries in China include F&B, hotels, tourism, department stores, and appliances. These industries share the same nature- they are B2C businesses that require high fixed costs, such as labor and rent.
On the other hand, the Bitcoin mining industry seems hardly affected by coronavirus outbreak, although major mining rig manufacturers delayed production and shipments, and some mining pools in specific areas have been shut down. The epidemic has not caused much damage to the Bitcoin hashrate. The stable hashrate and difficulty curve below confirms that there is no large-scale shutdown of mining fields.
On Feb 13, the stock price of major mining rig manufacturer Canaan Inc (CAN) listed on Nasdaq soared 80%, and market value reached nearly 1.3 billion dollars. Cannan’s stock price has been sluggish since its listing. The soaring stock price is more due to the recent surge in bitcoin prices, but it also tells that the epidemic does not have much impact on these manufacturers.
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