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Bitcoin mining likely didn’t contribute to Texas’ power outages, says expert

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Though many Texans are still suffering in the aftermath of a winter storm that left millions without power and running water for days, it’s unlikely that the crypto mining farms in the state played much of a role during the crisis.

Speaking to Cointelegraph, Kristy-Leigh Minehan, a mining consultant and chief technology officer of NEM Software, said Texas doesn’t currently have enough mining hardware in operation to cause significant problems in the power grid when compared with that of major regions like Sichuan.

According to Minehan, German Bitcoin (BTC) mining operator Northern Data is likely the only one that could have had a significant impact on the state’s power supply. The firm owns a mining farm in East Texas, with others like HODL Ranch and Layer1 out in West Texas. The mining expert added that the hashrate in Texas is not enough to disrupt the state’s energy grid, which includes farms that power their rigs using excess gas formed as a byproduct of mining oil.

Minehan said many of the mining farms in Texas are powered by a mix of renewables and coal. Though they are still dependent on the state’s energy grid, they also have access to generators when needed.

The effects of a disaster in Texas or the Southern United States on the Bitcoin hash rate are almost statistically insignificant when compared with one in China, whose miners control more than half the network’s hashing power. Minehan noted that the BTC hash rate only dropped roughly 10 exhashes per second during the recent snowstorm, which isn’t markedly more than the typical 5 EH/s fluctuations on a day-to-day basis. Blockchain data shows that the hash rate fell from 160 million TH/s on Feb. 11 to 150 million TH/s following the coldest night of the winter storm.

Minehan opined that it was unlikely for mining farms in North America to take the lead on the global hashrate without greater access to the hardware supply lines. She said a major industry player like Intel — with established supply chains — getting deeper into developing mining chips could potentially turn the tide, but right now it seems like China will remain the stronghold due to it having direct access to mining rig manufacturers and the silicon used for chips.

Source: https://cointelegraph.com/news/bitcoin-mining-likely-didn-t-contribute-to-texas-power-outages-says-expert

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How strong is the floor to Bitcoin’s price?

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A volatile few weeks for the cryptocurrency market have instilled fear in the minds of investors, many of whom hadn’t anticipated the short-term sell-off. While Bitcoin’s price had recovered somewhat to trade around $47,700 at press time, research from Chainalysis suggests that Bitcoin’s floor prices are stronger than before.

Philip Gradwell, Chief Economist at Chainalysis, explained that the floor of these recent price swings can be determined by analyzing the price level at which different types of investors entered the market.

Source: Chainalysis

Gradwell found that investors who acquired at least 1,000 BTC since the end of November 2020 have bought 1.7 million BTC at an average price of $35,000 per Bitcoin. “This recent and rapacious willingness to buy at this price level likely puts a floor on the Bitcoin price of at least $35k,” the analyst went on to observe.

According to him, the market has changed radically since the end of November. Prior to the same, larger investors held 1 million BTC at an average purchase price of $14.8k. However, the same set of investors has since entered the market to hold more Bitcoin at double the cost, with the Chief Economist adding,

“There is a far stronger floor to the price than ever before.”

Gradwell’s analysis can be further supported by a recent report from CoinMetrics. The crypto-market analytics research firm found that on-chain indicators showed signs of a key metric resetting, one with positive implications for Bitcoin.

Source: CoinMetrics

Bitcoin’s Spent Output Profit Ratio (SOPR) is a ratio of the price at the time a UTXO is spent to its price at the time of creation. Essentially, this estimates whether holders are selling at a profit or at a loss.

CoinMetrics found that while the BTC SOPR dropped below one on 27 February for only the second time since October 2020, implying that investors were capitulating and selling at a loss, it rebounded back above one on 28 February. What did this mean? Well, it suggested that the market is stabilizing once again, a finding consistent with Gradwell’s findings.

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Source: https://eng.ambcrypto.com/how-strong-is-the-floor-to-bitcoins-price

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No crypto ban in India: Finance Minister predicts “very calibrated” stance

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Yet another “crypto ban” turns out to be temporary FUD.

In an interview with CNBC this morning, Indian Finance Minister Nirmala Sitharaman said that reports of a blanket ban on cryptocurrencies are overstated. While negotiations are ongoing, she said she expects the end result to be more tempered:

“Yes, a lot of negotiations, discussions are happening, with Reserve Bank,” said Sitharaman. “Obviously the Reserve Bank will be taking a quorum on how, what kind of unofficial currency, cryptocurrency will have to be planned, and how it has to be regulated. But also, we want to make sure that there’s a window available for all kinds of experiments which will have to take place in the crypto world.”

She went on to say that regulations won’t be as “severe” as have been previously reported. Authorities will “look inward” and take a “very calibrated” stance, in contrast to the “mixed messages coming in from across the world.”

“The world is moving fast with technology. We can’t pretend that we don’t want it. […] I can only give you this clue: that we are not closing our minds, we are certainly looking at ways in which experimentations can happen in the digital world, in cryptocurrency and so on.”

The comments from Sitharaman is no doubt a source of relief for crypto businesses, users, and hodlers in the world’s second most populous country. Earlier this month, a report from Bloomberg citing a senior Indian financial minister said that the country would be banning all cryptocurrencies

The hypothetical ban drew widespread criticism from across the crypto community, with some likening it to an attempt to ban the Internet. Some companies found the reports to be hot air, however, and continued on with developments apace

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Source: https://cointelegraph.com/news/no-crypto-ban-in-india-finance-minister-predicts-very-calibrated-stance

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Crypto Pundits Say US Money Laundering Legislation Could Cripple Bitcoin Market

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ECB's Lagarde Calls For Bitcoin Regulation At A Global Level

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Prior to leaving office, Donald Trump and his administration proposed new rules that they said were aimed at taking on money laundering via cryptocurrency. The new rules would require financial firms to record the identities of cryptocurrency holders.

Some experts believe this would cause a severe drop across the entire cryptocurrency market.

But the new proposed rules have opponents in both the cryptocurrency world and the traditional financial sector. Usual Bitcoin proponents like the Winklevoss twins have spoken out against harsher regulations and have been joined by other crypto companies like Coinbase and Kraken in voicing their anti-regulation opinions. But with companies like Fidelity and payment giants like Visa and MasterCard joining the anti-regulation movement, the cause has more power.

Matthew Maley, the chief market strategist for Miller Tabak & Co., a leading institutional trading firm, says it’s not the right time to be adding these rules. 

“Bitcoin is very risky and very volatile and it’s going to continue to be that way. If you add something like a new regulation, it’s going to be very vulnerable to a correction,” Maley said.

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Another tricky part of this situation is that the rules were proposed by Trump’s administration but must now be considered by the new Biden administration. Janet Yellen, Biden’s new Treasury Secretary has made seemingly positive and negative comments about Bitcoin and other cryptocurrencies but there is no real indication on whether or not she will impose rigid regulations on the cryptocurrency space. 

Crypto Pundits Say US Money Laundering Legislation Could Cripple Bitcoin Market
BTCUSD Chart By TradingView

There is no official timeline or deadline to determine how any rules will be considered or implemented at this time. But industry insiders remain steadfast in spreading information about the dangers of over-regulation. The Winklevoss brothers recently issued a statement that claims the new proposed rules could actually increase money laundering while damaging market value for no real reason.

Still, there is a healthy level of optimism in cryptocurrency regarding regulations for a few reasons. The crypto sector has allies in Congress on both sides of the aisle and a recent notice from the US chamber of commerce that anti-money laundering regulations could end up having a series of unintended consequences.

Furthermore, it was clear that the previous Treasury Secretary, Steve Mnuchin had a strong anti-crypto stance, while Janet Yellen seems to be taking a more neutral approach.


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The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

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Source: https://zycrypto.com/crypto-pundits-say-us-money-laundering-legislation-could-cripple-bitcoin-market/

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