$19,000 Holds Firm for Bitcoin – Are We Bottoming Out?
By Marcus Sotiriou, Analyst at the publicly listed digital asset broker GlobalBlock (TSXV:BLOK).
Bitcoin remains above $19,000, as it could be establishing a floor from $17,600 to around $19,000, before a significant relief rally to the upside. Sell pressure continues to be absorbed, despite the negative macroeconomic news.
The report released yesterday by the Bitcoin Mining Council (BMC) has raised some eyebrows, however, as it showed that Bitcoin has seen a 41% increase in energy consumption year-over-year (YoY). This has raised some concerns that regulators could clamp down on crypto mining.
Nonetheless, mining efficiency increased 23% YoY, and sustainable power mix was 59.4%, above 50% for the 6th quarter in a row.
Despite the dramatic improvements in energy efficiency and a more diverse and sustainable energy mix, the increase in energy consumption could draw the attention of regulators.
Bitcoin’s hashrate increased 8.34% in Q3 2022 and 73% YoY, even though Bitcoin has been in a downtrend.
Glassnode, a leading data analytics firm, claims that the “hashrate rise is due to more efficient mining hardware coming online and/or miners with superior balance sheets having a larger share of the hash power network.”
After rejecting a proposal to ban crypto mining in March, the EU released documentation yesterday that outlined an action plan to implement the European Green Deal and the REPowerEU Plan — These plans are in place to keep a close eye on crypto mining activities and their environmental effects.
The U.S. is moving slower than the EU in terms of regulatory movements. In September, the White House Science Office published a 46-page document that investigated the climate and energy implications of crypto-assets. An actual plan has yet to be laid out, however this new mining report could instigate action from both the EU and U.S. regulators soon.