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Crypto asset manager sees bitcoin mining shift from China to North America

Tue, 11th Feb 2020 18:41

* Attempts to move mining to N.America -Grayscale founder

By Tom Wilson

LONDON, Feb 11 (Reuters) - The world's biggest
cryptocurrency asset manager said on Tuesday it was seeing
efforts to shift bitcoin production to North America from China,
which dominates digital coin mining.

Barry Silbert, founder of New York-based Grayscale
Investments, made the observation in an online presentation to
investors, without saying why the shift was occurring.

Many mainstream investors such as pension funds or asset
managers have been reluctant to embrace bitcoin,
concerned at its volatility, security breaches and lack of
transparent markets.

Bitcoin, heavily favoured by enthusiasts and retail
investors since it emerged more than a decade ago, has gained
increasing interest from hedge funds and trading firms.

Many are drawn to its potential for high returns in an era
of rock-bottom interest rates.

China's bitcoin miners control around two-thirds of the
crypto network's processing power, research last year estimated.

That dominance has allowed Chinese miners to produce greater
numbers of coins, and has also stoked demand for mining gear
produced in the country.

"What I have seen recently, probably over the past three to
six months, is a real growing shift towards attempts to move a
lot of that activity outside of China into specifically the U.S.
and Canada," said Silbert.

PUZZLES EARN COINS

Bitcoin miners - typically firms that run collections of
highly-powered computers hooked up to cheap, plentiful
electricity - compete against others in the bitcoin network to
solve complex maths puzzles and earn new coins.

At Tuesday's bitcoin price of around $10,300, miners produce
bitcoin worth around $6.7 billion every year.

The lucrative activity often takes place in cold climates or
sparsely populated areas, such as Scandinavia and Quebec,
because of the vast amounts of heat it produces.

Chinese firms such as Bitmain have become among the world's
biggest miners and manufacturers of bitcoin mining hardware.
Another maker, Canaan, launched an initial public
offering in November, but got a lukewarm investor response.

Grayscale, which oversees around $3.1 billion worth of
cryptocurrencies, has been striving to attract larger investors
to digital coins.

Last month it became the first digital currency investment
vehicle to attain the status of reporting company at the U.S.
Securities and Exchange Commission, it said on Tuesday.

This subjects its crypto products to the same reporting
standards as those traded on major exchanges.
(Reporting by Tom Wilson)

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