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Will Foundry, a subsidiary of Grayscale's parent company, enter the BTC mining industry and will it affect Chinese miners?



China is home to the world's largest crypto mining industry, although many other countries are implementing strategies to attract more mining companies.

The U.S. and Canada have attempted to challenge China’s global dominance in crypto mining for five consecutive years since 2018. Data from researchers at the University of Cambridge shows that China dominates the hash rate of the Bitcoin network, accounting for more than 65%, while the second-ranked United States contributed only 7.24%.

Such a large and significant disparity in the Bitcoin mining map has invisibly driven massive investments in North America and a handful of other countries to boost crypto mining operations. A major advantage China offers is lower electricity costs and more affordable mining equipment, as China is also home to the largest cryptocurrency miner manufacturers.

Grayscale founder: 99% of cryptocurrency prices are too high: Golden Finance reported that Grayscale founder Barry Silbert said on Twitter: "I have done more VIX index through UVXY to prepare for macro fireworks." , a Twitter user asked: "Specifically, what kind of macro fireworks are you thinking of?" Silbert replied: "I don't know what the fuse will be, so there is a volatility hedge. But food prices, oil prices, Investor complacency, excessive speculation, lack of trust in the Fed, interest rate normalization, meme stocks, overpriced cryptocurrencies, etc. are all on my mind.” The netizen continued to ask: “Do you think cryptocurrencies are generally overpriced? Or is it just a bunch of junk coins that have no place at all and are overpriced?" Silbert replied: "99% overpriced." [2021/6/15 23:36:42]

Grayscale — the largest crypto asset manager that is also an investment firm — may be on the front line of the fight against China’s dominance of crypto mining. Grayscale’s parent company, Digital Currency Group (DCG), has invested $100 million in its subsidiary Foundry, a crypto mining and staking investment firm, to expand its bitcoin mining infrastructure in North America.

Grayscale Ethereum Trust Price Increased Over 270% in Q4 2020: Since October 1, the price of Grayscale Ethereum Trust (ETHE) has nearly tripled in the fourth quarter of 2020. The price of ETHE was around $39 when it reached a local low at the beginning of the fourth quarter. As of press time, the price of each ETHE has reached $146, which means that it has increased by 274% in less than three months. Recently, Grayscale has been quietly accumulating Ethereum. As of now, ETHE’s managed assets are 1.73 billion US dollars, which is equivalent to about 2.94 million ETH held by Grayscale. (EWN)[2020/12/16 15:22:56]

Foundry CEO Mike Colyer said the company is looking to build out its mining operations and support other companies with similar interests in the U.S. and Canada, “We want to empower decentralized infrastructure in the new digital economy, and we The work will support the development and growth of the mining business, especially in North America."

Grayscale’s total assets under management dropped to US$10.8 billion: Jinse Finance reported that according to official Twitter, as of November 27, Grayscale’s total assets under management dropped to US$10.8 billion. The Bitcoin Trust (GBTC) traded at $18.83 per share, down 9.77% from the previous day; the Ethereum Trust (ETHE) traded at $85 per share, down 11.90% from the previous day. Previously, Grayscale’s total asset management scale reached US$12.2 billion on November 25. [2020/11/28 22:24:39]

On August 27th, DCG announced the launch of Foundry, a wholly-owned subsidiary focused on the encryption mining industry, officially announcing its entry into the Bitcoin mining industry. DCG has committed to investing more than $100 million in Foundry by 2021.

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According to the announcement, Foundry was established in 2019 to provide digital asset miners and manufacturers with institutional-level expertise, capital, and market intelligence, providing resources to build, maintain, and secure decentralized networks. The company currently provides three services to the mining ecosystem: equipment financing and procurement; mining and staking services; and consulting services. Former Core Scientific executive Mike Colyer is CEO of Foundry.

DCG also revealed that Foundry owns one of the largest bitcoin mining farms in North America, has provided tens of millions of dollars in equipment financing to other mining organizations, and helped purchase about half of the bitcoin mining machines delivered in North America.

On September 10, Bitmain’s official blog posted that Bitmain has reached a cooperation with Foundry, a subsidiary of DCG’s encryption mining industry, and the cooperation has been going on for some time. Foundry CEO Mike Colyer said that the cooperation will help North American mining companies purchase mining equipment.

The Foundry’s move is aimed at partially centralizing the Bitcoin network and is speculated to have the support of the U.S. Congress. In April, the U.S. Congress introduced a bill to support the development of blockchain and encryption technology, including mining operations, to help the U.S. remain competitive in the face of China’s continued dominance.

DCG CEO Barry Silbert said that Foundry will unite miners and manufacturers to build a better financial system: "Digital asset mining and staking are the backbone of blockchain technology, which will drive this progress. Foundry Bringing critical resources and guidance to an important corner of the industry, Mike Colyer and his team have the expertise, credibility and integrity to support the evolving needs of miners and manufacturers."

So far, China has practiced near-zero tolerance for cryptocurrencies — from the banning of ICOs in 2017 to the closure of unregulated exchanges. However, Chinese citizens can buy, sell or hold various cryptocurrencies. But miners have been operating in a gray area because different places have different regulations for investors in crypto mining.

That makes the fate of Chinese miners elusive, especially with recent regulatory changes in Inner Mongolia that will make the region China's most expensive mining base. Other miners in Sichuan have also expressed concern that the 30% cut to electricity tax cuts may also apply to them.

Odaily Planet Daily Note: According to Wu Shuo Blockchain’s report on August 28, the Inner Mongolia Industry and Information Technology Department issued the “Notice on Matters Concerning Mining Enterprises’ Participation in the Inner Mongolia Electric Power Multilateral Trading Market” to Inner Mongolia Electric Power (Group) Co., Ltd. on the 24th of the same month , 21 mining farms have been designated to suspend their participation in multilateral electricity transactions, which will lead to an increase of 1/3 or even higher in electricity bills. People familiar with the matter said that because the encryption mining industry is in an ambiguous area of policy, Inner Mongolia’s crackdown on the coal system and associated electricity may affect the stability of the existing mining industry, and the uncertainty of electricity prices has greatly increased.

In addition, Chris Larsen, former CEO of Ripple, warned that the high dependence of Bitcoin computing power on Chinese miners is very dangerous to the national security of the United States, and the United States should take measures to counter China's leading position in this ongoing technological war. status.

This article is from Zycrypto, original author: Bernice Nyambura

Translator of Odaily Planet Daily | Nian Yin Sitang


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