London Daily

Focus on the big picture.
Friday, Apr 03, 2026

Bitcoin's recovery is in question as miners search for the exits

Bitcoin's recovery is in question as miners search for the exits

Bitcoin has slumped to pre-February levels after investors became spooked by China's crypto crackdown. How much damage is it likely to suffer?

Cryptocurrencies fought to find a foothold on Monday after cheerleading from Tesla boss Elon Musk at the weekend seemed unable to offset pressure from spooked investors amid a crackdown on the asset class in China.

Musk had lent a bid on Saturday by tweeting support for crypto in "the true battle" with fiat currencies.

But on Sunday, prices slumped as "miners" - those who mint crypto by verifying transactions - halted Chinese operations in the face of increasing scrutiny from authorities.


Bitcoin climbed as high as $35,970 (€29,459) from Sunday's trough at $31,107 (€25,473), but the growing sense of a shakeout flowing through the market left it struggling to make further gains.

It remains some 45 per cent below last month's record peak of $64.895 (€53,142).

The collapse leaves the world's biggest cryptocurrency back where it traded in February, before Tesla announced a $1.5 billion (€1.2 billion) investment in Bitcoin and made a since-reversed decision to accept it as payment for cars.

Rival cryptocurrency Ether hit an almost two-month low around $1,730 (€1,417) on Sunday and bounced as high as $2,101 (€1,720) on Monday before losing some steam. Dogecoin, launched as a parody before Musk's backing vaulted it up more than a hundredfold this year, last traded at $0.30 (€0.25).

"After a brief bounce off last week's multi-month lows, some of the paper-handed types have seemingly sold-out," said IG Markets' analyst Kyle Rodda, using the market term for short-term holders who sell at the first signs of trouble.

"Or (they) decided to pack it in and cut their losses as Bitcoin's momentum, and the speculative mania that drove it, almost entirely disappears," he said.

China begins its crackdown


The trigger for the initial crypto selloff appeared to come from a hardening stance from Chinese regulators last week, which stepped up further on Friday when a State Council committee in the country vowed to crack down on miners in particular.

Chinese miners currently account for some 70 per cent of the world's supply of Bitcoin.

"Many miners keep much of the bitcoin/ETH etc that they mine and don't hedge it all into fiat right away," said James Quinn, managing partner at Q9 Capital, a Hong Kong-based cryptocurrency private wealth manager.

"If they are pulling up stakes or shutting down, they may need to reduce their balance sheets in the short term".

Late on Sunday, Huobi Mall, part of cryptocurrency exchange Huobi, said on Monday it suspended crypto mining that services mainland Chinese clients. BTC.TOP, a crypto mining pool, has suspended its China business citing regulatory risks, while crypto miner HashCow said it would halt buying new Bitcoin "rigs".

Crypto miners use rigs - increasingly powerful, specially-designed computer equipment - to verify blockchain transactions in a process that produces newly-minted cryptocurrencies.

"Crypto mining consumes a lot of energy, which runs counter to China's carbon neutrality goals," said Chen Jiahe, chief investment officer of Beijing-based family office Novem Arcae Technologies.

The annual energy consumption of China's cryptocurrency miners is expected to peak in 2024 at about 297 terawatt-hours, greater than all the power consumption by Italy in 2016, according to a study recently published in the scientific journal Nature Communications.

Chinese President Xi Jinping has pledged carbon neutrality by 2060.

China has already lost its position as a global cryptocurrency trading centre after Beijing banned crypto exchanges in 2017.

"Eventually, China will lose crypto computing power to foreign markets as well," BTC.TOP founder Jiang wrote, predicting the rise of U.S. and European mining pools.

According to Chen, the crypto craze - if not curbed - could turn into froth similar to the Dutch tulipmania in the 17th century, which is often regarded as the first financial bubble in recorded history.

"The only difference is that after the tulip bubble burst, there were still some beautiful flowers left," said Chen.

"But when the virtual currency bubble bursts, what would be left are merely some computer codes".

Newsletter

Related Articles

0:00
0:00
Close
Trump’s Strategic Pressure on UK Seen as Push for Stronger Alignment and Fairer Terms
UK Focuses on Trade Finance to Secure Critical Materials for Defence and Energy Sectors
Majority of UK Businesses Hit by Middle East Conflict While Confidence Holds Firm
UK Royal Navy Faces Renewed Scrutiny as Debate Intensifies Over Capability and Readiness
Reform UK Faces Mounting Distractions as Policy Agenda Struggles to Gain Traction
Investigation Launched Into Northern Cyprus IVF Clinics After UK Families Receive Incorrect Sperm
International Meeting Issues Unified Call to Safeguard Navigation Through Strait of Hormuz
Potential Strait of Hormuz Closure Raises Concerns Over UK Food and Medicine Supply Chains
UK Leads Coalition of Over Forty Nations Urging Iran to Reopen Strait of Hormuz
UK Secures Tariff-Free Access for Medicines in Landmark US Pharma Trade Agreement
King Charles III Invited to Address Joint Session of U.S. Congress in Rare Diplomatic Honor
Debate Grows Over Whether Expanded North Sea Drilling Can Reduce UK Energy Bills
UK Faces Heightened Risk of Jet Fuel Shortages, Airline Chief Warns
UK Ends Police Investigations into Lawful Social Media Posts After Review Finds Overreach
Abramovich Moves to Establish Charity for Frozen Chelsea Sale Proceeds Amid UK Dispute
Starmer Reaffirms NATO Commitment While Responding to Trump’s Strategic Critique
UK Aid Reductions Raise Fears of Severe Human Impact Across Parts of Africa
UK Signals Renewed Push for EU Cooperation as Iran Conflict Reshapes Security Landscape
Bank of England Signals Caution as Bailey Advises Markets Against Expecting Rate Hikes
UK to Convene Global Coalition to Restore Shipping Through Strait of Hormuz
Trump Signals Possible NATO Reassessment, Emphasizes Stronger U.S. Strategic Autonomy
Australia Joins British-Led Efforts to Reopen Strait of Hormuz Amid Escalating Tensions
King Charles Plans US State Visit as UK Strengthens Ties with Trump Leadership
UK Regulator Launches Investigation Into Microsoft’s Business Software Practices
Kanye West Set for High-Profile Return to UK Stage at Wireless Festival
Trump Presses Europe to Strengthen Commitment as Iran Conflict Escalates
UK to Deploy Additional Troops to Middle East Amid Rising Regional Tensions
UK Authorities Face Claims of Heavy-Handed Measures in Monitoring Released Pro-Palestine Activists
Trump Calls on UK to Secure Its Own Energy as Iran Conflict Intensifies
Nigel Farage Declines Invitation to UK Conservative Conference Led by Liz Truss
Trump Warns Allies to Take Responsibility as Rift Deepens with UK and France Over Iran Conflict
How Britain’s Prime Minister Controls U.S. Bomber Access in Escalating Iran Conflict
Trump Urges Allies to Secure Their Own Oil Supplies as Hormuz Crisis Disrupts Global Energy
Russia Expels British Diplomat as UK Pushes Back Against Pressure
White House App Faces Scrutiny After Claims of Continuous User Location Tracking
BBC Faces Scrutiny Over Allegations of Paid Content Linked to Saudi Arabia
UK-France Coastal Patrol Agreement Nears Breakdown Amid Migration Pressures
UK Police Detain Pro-Palestine Activist Again Weeks After Bail Release
FTSE 100 Advances as Energy and Mining Shares Gain Amid Middle East Tensions
Eli Lilly Seeks UK Pricing Deal to Unlock Renewed Pharmaceutical Investment
Three Arrested in UK After Massive Cocaine Haul Discovered Hidden in Banana Shipment
UK Fuel Prices Poised for Further Surge Amid Global Energy Pressures
Apple Subsidiary Penalized by UK Authorities for Breach of Moscow Sanctions
Western Allies Intensify Coordinated Sanctions Strategy Against Russia
UK Lawmakers Face Criticism Over Renewed Push for Social Media Restrictions
Starmer Signals UK Crackdown on Addictive Social Media Features
Rising Costs Push One in Five UK Hospitality Businesses to the Brink of Closure
Man Arrested on Suspicion of Attempted Murder After Car Strikes Pedestrians in UK, Injuring Seven
Escalating Conflict Involving Iran Tightens Fiscal Pressures and Highlights UK Economic Vulnerabilities
UK Moves to Confront Russian ‘Shadow Fleet’ Operating in Its Waters
×