Poolin Reward Tokens Plummet In Response To China Bitcoin Mining Exodus
Following China’s bitcoin mining crackdowns, Poolin has suspended rewards for its tokenized hashrate contracts.
The wBTC and wETH rewards are on pause until “less than 60 days”, as per a blog post from Poolin.
Poolin Pauses Rewards For pBTC35A And pETH18C
Poolin’s tokenized hashrate contracts, pBTC35A and pETH18C, have all their wBTC and wETH rewards suspended until less than 60 days.
The reason behind the move is China’s ongoing crackdown on mining farms, which has forced miners around the country to migrate elsewhere.
The 60-days timeframe correlates to the migration time needed to move mining farms out of China.
As a consequence of the rewards payout suspension, holders are pulling out of the contracts in hordes.
Related Reading | Bitcoin Hash Rate Goes On Death Spiral Post China’s Crackdown On Miners
Here is how the pETH token price and volume chart looks like right now:
pETH price rapidly goes down | Source: Compass Mining Memo
The chart shows that pETH price has rapidly corrected following the announcement.
Similarly for pBTC, the below chart highlights the trend in its price and volume:
pBTC plummets following rewards suspension | Source: Compass Mining Memo
Two other notable takeaways from the graphs are that pETH hit a single-day $2 million turnover in volume for the first time ever, but pBTC only hit a monthly high.
The other high turnovers in pBTC volume were in the months of April and May. The first one corresponds to the coal mine flooding incident in Xinjiang that cut power supply to Bitcoin miners, while the second one was caused by the 21% difficulty adjustment.
The Poolin team plans to pack and transport their mining rigs to another location within 60 days, after which rewards are expected to resume normally.
Related Reading | Institutional Bitcoin Selloff Leaves Retail With Bloody Aftermath
It should be noted that while wBTC and wETH rewards are paused, Poolin is still offering rewards in the Mars token.
Mars is the platform’s native governance token, holders of which can usually vote on decisions relating to the platform.
However, for the decision of cutting out wBTC and wETH rewards, no Mars holder was able to vote. Poolin went forth with the initiative by themselves.
Right now, Bitcoin is priced around $34k, up 2% in the past week, but down 7% in the last 30 days.
China’s latest mining crackdowns are also responsible for BTC’s latest crash. As BTC miners were also forced to shutdown their farms, and migrate elsewhere.
Here is a chart showing the trend in its price:
BTC seems to have stagnated around this point | Source: BTCUSD on TradingView