Bitcoin prices tumbled Monday after China took fresh steps to rein in cryptocurrency activity by shutting down mining operations in Sichuan province. Ostensibly, Beijing’s latest move was tied to concerns about crypto mining’s toll on the environment. The new crackdown follows a wave of restrictions designed, in theory, to protect its citizens from the highly volatile, speculative market.
But crypto observers know that in the end, it likely isn’t climate change or investors’ finances keeping government officials up at night.
Instead, it seems clear that Chinese authorities are worried about not being able to call the shots in the country’s crypto economy. Beijing would prefer to steer crypto zeal to the digital yuan, a bitcoin competitor that China is positioning to be the first major central bank-backed digital currency.
“They needed to squash bitcoin and that’s why you see the clampdown intensifying,” said Edward Moya, senior market analyst at Oanda.
At the same time that China was introducing new mining restrictions in Sichuan, the country gave a boost to its state-backed digital currency, rolling out 3,000 ATMs that can convert between digital yuan and cash.
There are some mixed messages: A statement from the Agricultural Bank of China affirming that it was continuing to deny crypto transactions following government guidance was posted and then quickly deleted, suggesting there is some confusion or disagreement over what path China should take. But with China doubling down on the digital yuan, restrictions are unlikely to ease anytime soon.
That means that bitcoin mining operations will have to continue moving to new places, including North America.
To delve into that shift, I spoke to Marathon Digital Holdings CEO Fred Thiel about his plans to expand operations in the U.S. Based in Las Vegas, Marathon Digital is one of the largest bitcoin mining companies in North America. The company’s shares, which have gyrated along with bitcoin’s swings, fell nearly 4% Monday amid the broader slide in crypto prices.
The conversation has been edited for length and clarity.

The Information: How does China’s recent crackdown affect bitcoin mining?
Fred Thiel: I hate to say it, but it's good for us because if you think about how bitcoin mining works, there are only 900 bitcoin awarded per day to miners, and as fewer miners are mining, or the global hashrate comes down, it means there are more rewards to be shared amongst miners that remain mining.
We’ve seen the global hash rate significantly drop recently. You’re seeing a number of provinces in China now starting to formally announce that they’re shutting down crypto mining.
We’re starting to see a number of miners in China liquidate their systems, selling their [mining computing equipment] on the secondary market or relocating [it] to places like Kazakhstan.
Will this increase bitcoin mining in the U.S.?
Absolutely. Look at us: Year-over-year, we’re going to add 100,000 miners [the computing installations used to mine bitcoin] in North America. To 12 months from Q1 of this year, to Q1 of next year—100,000 miners, doing 100 tera hash each. That is a huge growth in the global hashrate.
All the [North American] miners are buying new machines and adding them, so all of that will benefit the North American market share of the global hashrate. And I think you'll see China fall well below the 50-plus percent they have been at.
The mining fleet is growing in places like Latin America—another effect of El Salvador making bitcoin legal tender. El Salvador happens to have very cheap geothermal energy, which is perfect for mining because it's clean, it's totally efficient and they don't have to build power lines to distribute the electricity.
What steps does Marathon take to curb its own carbon footprint?
Thiel: We’re deploying another 70,000 miners through a relationship with Compute North, and that will be 100% carbon-neutral. We've also said that we are going to take the remaining 30% of our fleet that is not carbon-neutral today, and through carbon offsets and other activities that we're doing, move that to fully carbon-neutral. So as a company, our goal is to be fully carbon-neutral by the end of next year.
What would you say to environmental critics of bitcoin mining who don’t want it expanded in the U.S.?
Miners in North America are predominantly mining using carbon-neutral energy.
I think you're going to see that over a very short period of time, bitcoin miners are going to be fully carbon-neutral. You’re also going to see them partnering with entities and groups to really build out much better capability in the way of efficient renewable energy.
I think it’s also about transparency. The North American Mining Council, which is an organization that Marathon was involved in starting, [and] which is open to all miners in the industry, is really focused on providing education and transparency about how the industry uses power. So the organization will start publishing data about what mixes of power we use, how much we use it, where does it come from and the commitments from miners who are members regarding their transition to fully carbon-neutral.
How do you respond to the criticism that the Mining Council is an attempt to bring centralization to bitcoin?
This is simply establishing a standard for reporting on energy usage and creating better awareness about how we use energy. We don't control bitcoin prices—the market does. If we controlled bitcoin prices, believe me, you wouldn’t see the volatility. We can’t control it.
What sets Marathon apart from other bitcoin mining companies?
We figured the best way for us to differentiate ourselves from our colleagues in the industry was to grow very fast, and so we placed a big bet, which was correct in that there was a shortage of miners and so we were able to suck up a large volume of miners, so that those weren't available for the rest of the participants in the marketplace.
The other thing we've done differently is unlike Riot, for example, we have not gone and invested hundreds of millions of dollars in buying a hosting facility that hosts for third parties. We have not spent hundreds of millions of dollars like others in buying power generation. We're not vertically integrating in the way others are doing it—we're very much a pure play mining operator.
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