- Vietnam’s market had seen a drop in sales of crypto mining rigs earlier this year, but is seeing a resurgence now.
- The local vendors and investors attribute the rise in sales to increase in prices across the cryptocurrency market.
- While many locals continue to buy Bitcoin and other cryptocurrencies as investments, it is illegal in the country to use private digital currencies as payment.
The rise in Bitcoin’s price to above the long awaited $52,000 threshold isn’t just making investors money. It’s also a boon for the companies sellingcryptocurrency
mining rigs — specialised mining equipment — to Vietnam, where regulation around the new financial asset is still in the works.
The country, which is one of the hubs forcrypto
mining around the world, is seeing cryptocurrency mining returning ‘with a vengeance’ after the rally, according to Quang Thuan, a local mining rig shop owner. He told local news agency VnExpress that sales in September have tripled as compared to last month alongside the rise in Bitcoin’s price — at least at his shop in Ho Chi Minh City, Vietnam’s capital.
Multiple individuals from the local crypto mining community added that the overall computing power being put towards mining Bitcoin and other currencies has increased. The world’s most valuable cryptocurrency hit the $50,000 price tag around the middle of August and has been surging since, albeit not at 2020 levels.
At 1:10 pm Indian Standard Time (IST) , the currency was priced at $52,380.12.
The trend, to be fair, isn’t particularly unsurprising. Research firm Finder recently reported that Vietnam had the largest percentage of crypto ownership around the world. The country was followed by others like Indonesia, India, Malaysia and Philippines. But, of the top five, Vietnam was the only country that had a history in crypto mining.
Back in 2017, the country imported more than 7,000 rigs. Ironically, most of the rigs came from China.
Currently, the use of cryptocurrencies to make purchases is illegal in the country.The central bank has repeatedly issued warnings that investing in cryptocurrencies increases the risk of falling prey to pyramid schemes and other scams.
“The use of Bitcoin as a means of payment in Vietnam is a violation of the law and may be subject to administrative or criminal sanctions.”
Warning statement by the State Bank of Vietnam
The locals, however, still choose to invest in various cryptocurrencies from Bitcoin to Chia coin. In February this year, during the pandemic, many internet cafes in the capital city switched over to cryptocurrency minings with footfall dropping drastically.
After China’s clampdown on cryptocurrency mining across select provinces in the country, it had temporarily gotten easier to mine for Bitcoin. There were less people on the network, so Bitcoin adjusted its ‘hashrate’ to make itself easier and more profitable to mine.
However, by August, the free ride was over. During the scheduled bi-weekly update, Bitcoin reset how tough it is for miners to mine — making it more difficult by 7.3%. This was the first signal that some of the miners that used to be in China are starting to settle into their homes overseas.
Currently, the network difficulty stands at 17.615 terahash (t) — around halfway between the 25.046t highs of May and 13.673t lows of July.
Crypto miners, many of whom used to be based in China till even the early months this year, had started moving out of the country around April. The Chinese government’s crackdowns on the mining industry have been well documented, and have also led to a rise in revenues for mining farms in North America. Revenue reports from firms like Bitfarms in Canada, have shown as much as 29% between the months of April to June this year.
With a crypto bull run expected again, it’s likely that the sale of rigs in these countries will increase too. The California-based tech giant Nvidia missed its targets for GPUs designed specifically for crypto mining. It’s hoping to get out of the slump with Bitcoin crossing $53,000.
On August 20, blockchain-analytics platform Glassnode had reported that a ‘golden cross’ between the 30-day and 60-day moving averages of Bitcoin’s hash ribbon was incoming, raising expectations of a bull run. A golden cross occurs when the average value of an asset in the short term crosses that of its average value in the long term.
Other than Bitcoin’s rising prices though, the crypto industry has other reasons to be hopeful. Ethereum’s recent London Hard Fork, an update that rolled out early last month, and brought a new form of mining to Ethereum, is expected to bolster use for the token. Similarly, popular token Cardano also introduced proof-of-stake mining with an update recently.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
Bitcoin, Solana, Cardano and other top cryptocurrencies to watch out for today
Ethereum's daily issuance just went negative for the first time, following the network overhaul that burns coins
Crypto exchange FTX quickly starts charging users $500 to mint their own NFTs after being spammed with images of fish