BT Daily News: Bitcoin at Rs 16 lakh, crypto firms welcome OECD framework, and more

by CHarvey October 13, 2022

1. Bitcoin at Rs 16.35 lakh

Major cryptocurrencies were trading in the red early on October 13 as the global crypto market cap decreased 0.05 percent to $918.19 billion over the last day. The total crypto market volume dropped 9.88 percent to $44.13 billion over the last 24 hours.

The total volume in DeFi stood at $2.40 billion, which is 5.44 percent of the total crypto market 24-hour volume. The volume of all stable coins was $41.54 billion, which is 94.13 percent of the total crypto market 24-hour volume.

The price of bitcoin hovered around Rs 16 lakh, with a dominance of 39.90 percent, which is an increase of 0.12 percent over the day, according to Coinmarketcap.

2. Indian crypto exchanges give a thumbs-up for OECD reporting framework, say it will promote transparency

Indian crypto exchanges are cheering the new tax reporting framework released by the Organization for Economic Co-operation and Development (OECD) amid a sharp decline in trading volumes on crypto markets.

They are also hoping the Crypto-Asset Reporting Framework (CARF) of the OECD will prompt the Indian government to frame its own regulations and lower taxes, helping revive the crypto market.

“So far, we don't have any concrete rules in India outside taxes; this will be the first attempt. Once the rules have come in place for OECD…, India will be bound to come up with rules,” said Rajagopal Menon, vice president of crypto exchange WazirX.

The framework ensures "the collection and automatic exchange of information on transactions for relevant crypto" assets. It covers exchanges, brokers, and ATM operators that facilitate exchanges between crypto assets.

The framework's due diligence process requires both individual and entity customers to identify themselves. More importantly, it directs crypto asset firms to report to the regulators in the country they do business in.

3. Bitcoin mining reserves are at a 12-year low—Here’s why

The amount of Bitcoin held in reserve by mining companies has fallen to lows not seen since February 2010, according to blockchain analytics firm IntoTheBlock. And that’s been true for most of this year.

As of Wednesday afternoon, Bitcoin miners have 1.91 million BTC in their wallets, according to IntoTheBlock. Bitcoin miner reserves have been above the 2 million BTC mark—first surpassed on February 19, 2010—for only 46 days since the start of 2022. This illustrates the impact of miners selling their Bitcoin throughout the year, at times selling more in a month than they mined, to compensate for profits that have dwindled as the market has suffered.

The last time that miner reserves were this low was a very different time for Bitcoin. In 2010, the cryptocurrency had only been released as open-source software a year prior, a few months after creator Satoshi Nakamoto published a white paper describing how the peer-to-peer electronic cash worked.

Bitcoin was first exchanged for U.S. dollars in 2009 on the New Liberty Standard Exchange, when $5.21 could buy 5,050 BTC. At today's prices, that amount of BTC would be worth almost $97 million.

4. Further BTC mining consolidation as Crusoe acquires peer mining firm

Amid soaring Bitcoin mining difficulty and sinking mining profitability, Colorado-based Bitcoin miner Crusoe Energy Systems has announced the acquisition of the operating assets of portable BTC mining operator Great American Mining (GAM).

The deal will see GAM’s operations integrate into Crusoe’s, adding over 10 megawatts (MW) to its mining output and around 4,000 application-specific integrated circuit (ASIC) crypto mining rigs — increasing Crusoe’s capacity by about 9%, according to the company.

GAM builds and deploys portable BTC mining facilities — vehicle trailer-mounted containers enclosed with ASIC miners — with the goal of helping oil and gas companies take advantage of stranded or otherwise wasted natural gas by using it to power the facility to mine BTC.

Crusoe will have roughly 125 of these gas-powered waste containers deployed and operating following the acquisition, which it says could reduce an annual CO2-equivalent emission of around 170,000 cars.

5. US Senator Warren Leads Congressional Group's Probe into Bitcoin Mining Energy Use in Texas

A group of seven Democratic lawmakers in Washington, D.C., led by Sen. Elizabeth Warren of Massachusetts, are looking into the energy usage and carbon emissions of the bitcoin mining industry in Texas as well as the impact on the grid and local consumers.

In a letter Wednesday addressed to Pablo Vegas, the CEO of the Electric Reliability Council of Texas (ERCOT), the group expressed concerns that bitcoin mining's enormous demand for energy in Texas is straining the state's grid, adversely impacting consumers and U.S. climate goals. ERCOT manages the Texas electricity grid, which operates independently from the rest of the country.

"Crypto mining is adding significant demand to an already unreliable grid [and] contributing to the global climate crisis," claim the lawmakers, who further assert miners are benefitting at the expense of consumers from "huge ERCOT subsidies in the form of demand response agreements."

So-called demand response programs mean that when demand for energy across the grid is high, miners’ power down their operations in exchange for energy credits that they can use in the future, thus releasing power back to the struggling grid. About 1 GW of mining powered down this summer as heatwaves swept across the state.