Here's why bitcoin mining may get a whole lot easier

China’s bitcoin crackdown intensified over the weekend, with authorities in the hydropower-rich Sichuan province ordering crypto miners to shut down operations. According to reports, more than 90% of China’s bitcoin mining capacity is estimated to be shut down. Though it may not be good news for bitcoin miners in China, others could stand to benefit. Subscribe to CNBC PRO for access to investor and analyst insights on crypto and more: https://cnb.cx/2BT2E7y

Bitcoin continued to rebound from its lows for the year on Wednesday.

The cryptocurrency sank below the key $30,000 threshold Tuesday, at one point briefly erasing all its 2023 gains. It later recovered to turn positive for the day.

On Wednesday, bitcoin surged 18%, climbing back above the $34,000 mark in early morning trading, according to Coin Metrics data. It last changed hands at $33,641.27, up 3% on the day.

Smaller rivals also surged, with ether rising 6% to $2,014 and XRP up 9% at a price of 64 cents. The reason for the moves higher wasn’t clear, but cryptocurrencies are known for their volatility.

Bitcoin had a solid start to the year, rallying to an all-time high of almost $65,000 ahead of crypto exchange Coinbase’s blockbuster debut and as institutional investors appeared to be warming to it.

But the world’s biggest digital coin has been on a roller-coaster ride since, almost halving in value amid a slew of negative news.

In China, authorities have been clamping down on bitcoin mining, the power-intensive process for validating transactions and generating new bitcoins. Over the weekend, Beijing’s crackdown on crypto mining extended to the hydropower-rich Sichuan province.

Then, the People’s Bank of China on Monday said it had urged financial institutions including Alipay and major banks not to provide services related to cryptocurrency activities.

Investors have also become more concerned about bitcoin’s environmental impact, after Tesla CEO Elon Musk decided to stop accepting bitcoin as a method of payment for his company’s vehicles.

At the time, Musk said he was worried about bitcoin’s huge energy consumption and the “rapidly increasing use of fossil fuels” in mining the digital asset. However, he later said Tesla would accept bitcoin when at least half of bitcoin mining is confirmed to be powered by clean energy.

Critics of the cryptocurrency have long been wary of its impact on the environment. That could threaten the adoption of bitcoin by institutional investors, which are under growing pressure to invest in cleaner, more ethical assets.

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Here's why bitcoin mining may get a whole lot easier

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Kane Dane