Why China’s Bitcoin mining activity is surging again after a 4-year crackdown

The flow of capital into spot Bitcoin and Ethereum ETFs has shown signs of recovery, marking the first week of net-positive inflows since October, following a prolonged period of outflows. This shift indicates a potential stabilization in institutional demand for these cryptocurrencies after a challenging month.

Bitcoin's price has stabilized around $91,453, showing resilience after a significant sell-off, with analysts noting reclaimed support and a filled fair value gap, indicating potential for further upward movement. This price level is crucial as it reflects the market's response to recent volatility and bears guarding key resistance levels.

Architect Partners has asserted that the Bitcoin digital asset treasury model is not broken, countering prevailing concerns about the sustainability of Bitcoin investments amid market volatility. This statement comes as Bitcoin's price fluctuates significantly, recently rebounding toward $92,000 after a notable sell-off.

The People's Bank of China (PBOC) has reaffirmed its ban on cryptocurrency trading, responding to a resurgence in market speculation. The central bank is urging government institutions to intensify their crackdown on activities related to virtual currencies to mitigate illegal operations.

The G20 has been discussing the establishment of global cryptocurrency standards, reflecting the growing importance of digital assets in the financial landscape. This week, the focus was on the future of Digital Asset Tokens (DATs) and the implications for regulatory frameworks worldwide.

Bitcoin miners are facing a challenging December as the network's mining difficulty is set to increase from 149 trillion to nearly 150 trillion, while hashprice remains low at around $38.3 PH/s, just above the break-even point for many operations. This situation is exacerbated by a recent decline in Bitcoin's price, which has raised concerns among miners about the sustainability of their operations.

Bitcoin's price remains near $91,000, hindered by weak ETF flows and cautious derivatives trading, despite a rally in stocks and gold driven by rising bets on interest rate cuts. Analysts express concern over Bitcoin's inability to break this key resistance level.

Recent research indicates that Bitcoin's price action is closely mirroring the 2022 bear market, with a correlation rate reaching 98%. This trend coincides with a notable influx of $220 million into Bitcoin exchange-traded funds (ETFs), suggesting a potential shift in market sentiment.