Nano Labs Adopts Bitcoin Payments with China’s Evolving Crypto Approach

Sentiment Status: Positive

Despite strict regulations, China miners control over half of Bitcoin’s hash rate.

The China-based Nano Labs announced that it will now accept Bitcoin as a payment option. This new policy raises questions about whether it could be a precursor to an extensive shift in China’s crypto approach.

Nano Labs, a tech company focused on integrated circuit design and crypto mining chips revealed its decision to accept Bitcoin for transactions. The company aims to appeal to tech-savvy clients and address the global trend of integrating digital currency options.

The announcement coincided with a 2.81% rise in Nano Labs’ stock price, closing at $3.29 on the Nasdaq. Despite the recent jump, Nano Labs faced significant stock volatility, with shares plummeting by more than 60% over the last month alone. The company has yet to confirm if it will hold Bitcoin on its balance sheet.

The timing of Nano Labs’ decision is particularly intriguing. Since China’s crackdown on cryptocurrency mining and trading in 2021, businesses have been cautious about directly involving themselves in crypto. Beijing’s restrictive measures aimed to reduce Bitcoin mining and limit financial institutions from supporting digital currency transactions. However, recent events suggest a possible softening stance.

For instance, Lou Jiwei, a former Chinese finance minister, advocated for China to closely monitor developments in the digital currency. Moreover, a Shanghai court’s September acknowledgment of Bitcoin as a unique asset with scarcity and value reflects China’s gradual acceptance of crypto assets in specific legal and economic contexts. 

Founded in 2019, Nano Labs has positioned itself as a leader in high-performance computing (HPC) and mining chip design, offering products like the Cuckoo and Darkbird chip series. However, the company’s financial performance struggled since going public on Nasdaq in July 2022, with its stock declining roughly 95% since the IPO. Earlier this year, Nano Labs faced challenges meeting Nasdaq’s minimum market value requirements but managed to rectify its standing by mid-October.

By accepting Bitcoin, Nano Labs hopes to attract a solid client base, especially those who prioritize flexible digital payment options for global transactions. 

Nano Labs’ adoption of Bitcoin may serve as a precursor to a potential shift in China’s crypto policies. Despite China’s long-standing restrictions, the nation still wields influence in the global crypto market, with its miners controlling over half of Bitcoin’s hash rate. Furthermore, as Hong Kong introduces Bitcoin ETFs and other digital asset services, the possibility of policy evolution in mainland China seems plausible.