BT Daily News: US Share of Bitcoin Mining Has Spiked in the Past Two Years, From 3.5% To 38%
1. US Share of Bitcoin Mining Has Spiked in the Past Two Years, From 3.5% To 38%
Most mining firms are looking for places with low electricity costs, and the US provides that. The states could benefit from Bitcoin mining through tax revenue and employment creation. But they would have to make concessions due to the industry's excessive energy use and electrical waste.The most popular US state for Bitcoin mining is Texas. The state has abundant energy, which is essential for cryptocurrency mining. Also, the Lone Star State's climate is ideal for cooling the massive amount of heat that comes with mining Bitcoins.
It is beneficial for the Bitcoin market in the long run if more mining operations are based in the US. The recent increase in the country's mining share is a good sign that things are moving in the right direction. The US could play a significant role in making Bitcoin more decentralized, which is one of the cryptocurrency's main selling points.
However, the increasing popularity of Bitcoin mining in the US could also lead to more environmental problems. The industry is already facing criticism for its high energy consumption and electrical waste. If the trend continues, these problems are likely to get worse.
2. The Merge Doesn’t Solve Ethereum’s 'Atomic Composability'
Atomic composability is a technical term for saying that any application on a network can frictionlessly interact with any other application. Ethereum is going to consciously break composability by segregating parts of its network from each other in the implementation of sharding or layer 2 systems.
Web3 has four superpowers: tokenization, decentralized applications, two-sided markets without intermediaries and composability.
Taking away one of these superpowers by walling off certain applications from each other through specific types of blockchain sharding or layer 2 implementations (as nearly every smart contract platform does) is like separating the bat from the plant it pollinates.
We’re witnessing the impact on our world as we destroy natural diversity, separating flora and fauna from the ecosystems in which they have thrived and are interdependent.
Now, at the dawn of Web3, as we look to birth the most dynamic, flourishing digital ecosystem for the future of global finance, we can’t afford to make that same mistake. Decentralized networks that preserve all four superpowers, including atomic composability, will give emergent digital ecosystems the most room to flourish.
3. Total crypto market cap shows strength even after the Merge and Federal Reserve rate hike
Many of the top-80 cryptocurrencies dropped by 15%+ in the past week, but the Tether premium in Asia-based futures markets shows traders remain calm.Cryptocurrencies have been in a bear trend since mid-August after they failed to break above the $1.2 trillion market capitalization resistance. Even with the current bear trend and a brutal 25% correction, it has not been enough to break the three-month-long ascending trend.
The crypto markets' aggregate capitalization declined 7.2% to $920 billion in the seven days leading to Sept. 21. Investors wanted to play it safe ahead of the Federal Open Markets Committee meeting, which decided to increase the interest rate by 0.75%.
By increasing the cost of borrowing cash, the monetary authority aims to curb inflationary pressure while increasing the burden on consumer finance and corporate debt. This explains why investors moved away from risk assets, including stock markets, foreign currencies, commodities and cryptocurrencies. For instance, WTI oil prices ceded 6.8% from Sept. 14, and the MSCI China stock market index dropped 5.1%.
Ether (ETH) also saw a 17.3% retrace during the seven-day period and many altcoins performed even worse. The Ethereum network Merge and its subsequent impact on other GPU-mineable coins caused some skewed results among the worst weekly performers.
4. Bank of Russia, Finance Ministry Agree on Crypto Mining Regulation, Law Expected Soon
The Central Bank of Russia (CBR) and the Ministry of Finance (Minfin) have adopted a joint position on the regulation of crypto mining. The bitcoin-related activity has been expanding in the energy-rich nation, both as a profitable industry and as a source of additional income for many Russians.Earlier in September, Prime Minister Mikhail Mishustin asked the CBR, Minfin, Rosfinmonitoring, Russia’s financial watchdog, the Federal Tax Service, and the Federal Security Service to elaborate a common position on draft federal laws regulating the issuance and circulation of digital currencies, including their mining and use in international settlements.
The head of the Russian government also ordered the Ministry of Finance, with the participation of the Bank of Russia, to submit consensus proposals for the development of the market for digital financial assets (DFAs), including the application of decentralized technologies, by Dec. 1.
Russian authorities have been discussing the regulation of cryptocurrencies and related activities for quite some time, with the CBR and Minfin taking almost opposite positions until recently. While the central bank proposed a blanket ban, the department has favored legalization. However, the two regulators recently agreed that Russia would need cross-border crypto payments to deal with the pressure exerted by Western restrictions on its foreign trade.
5. Billions of people will use crypto by 2027
The bear market seems to have left Morehead completely cold, and yesterday he expressed his confidence in crypto in an interview with CNBC. The crypto prices are said to correlate strongly this year with the prices of traditional risk assets; the valuation of cryptocurrencies falls when the value of traditional risk assets falls, and vice versa. Morehead envisions a scenario in the near future where this may no longer be the case.According to Google Trends, internet interest in cryptocurrencies has hit a new low in recent weeks. Searches for ' bitcoin ' and 'crypto' are as popular now as they were before the bull run.
So-called mainstream interest in crypto is often a good measure of the state of affairs. The bull run in 2021 attracted a huge number of new users to crypto. However, many of these new users lose interest when prices fall. In times of dire macroeconomic conditions, the price of bitcoin is 70% below the peak of November 2021 and mainstream interest in crypto is hard to find.
According to Morehead, the low point of the current bear market is already behind us. He referred to the liquidity crisis within the crypto sector in June that led to the bankruptcy of Celsius and Voyager, among others. Morehead's optimism in the crypto sector is hopeful, but there is plenty of reason for pessimism. High global inflation and further expected interest rate hikes are anything but a rosy outlook.