Bitcoin also woke up this morning with a smile, continuing its upward trend and breaking the $59,000 level: now the situation for the crypto is very hot, especially in the United States where there is a growing enthusiasm among investors for Bitcoin ETFs and mining activities.
This type of financial products, approved on Wall Street at the beginning of January, are creating an unprecedented supply crunch, given the strong and constant demand flows that are taking BTC off the markets.
At the same time, the White House shows some concerns about the environmental implications of Bitcoin mining practice, and proposes a tax for those who use electricity for this purpose.
We see all the details below.
Summary
ETFs and mining activities bring Bitcoin to another dimension: FOMO enters the crypto market
Bitcoin continues to rise, this morning it surged past $59,000, driven by the ongoing positive news regarding Wall Street’s spot ETFs and the supply crisis in the market.
The “exchange traded funds” launched on the US stock exchanges by BlakcRock, Fidelity, ARK and company constantly attract new buyers, who by purchasing effectively remove the underlying BTC from the exchanges.
According to the data on “Heyapollo.com“, as of February 26th, the overall netflow of Bitcoins bought and sold through spot ETFs since the beginning of the year has reached an incredible amount of 127,100 BTC.
Demand pressure actually continued yesterday, and most likely the outcome will be the same today, with Grayscale liquidating part of its GBTC fund but at an increasingly slower pace, while other Fund Managers continue undeterred to increase their own sizes.
It is worth noting in a context like this how spot ETFs in the United States contribute to removing many more Bitcoins from the market daily than those generated through mining.
Two days ago for example, as highlighted by Bitcoin Magazine, net of a mining production of 900 BTC, the ETFs purchased 9,163 BTC, a figure more than 10 times higher.
Beyond the trend of various exchange traded fund managers acquiring or selling coins, which by the way does not depend on their will but rather on that of the customers who use their financial instruments to trade Bitcoin, it is interesting to note that even the volumes are reaching record figures.
According to The Block Dashboard data, since the approval of spot ETFs, the cumulative value of trades has exceeded the $58 billion threshold, making it one of the most successful launches on Wall Street.
BlackRock, which with its flagship ” iShares Bitcoin Trust ” (IBIT) represents the most purchased fund with the highest AUM after Grayscale, is breaking record after record in terms of market volumes.
Just the other day it surpassed another record high on its own ETF, reaching a total of 1.3 billion dollars in trades in a single trading session.
The scent of FOMO is starting to be felt in the air, with Bitcoin unleashed that seems to not want to stop and continue its climb towards new all-time highs.
At the moment, the crypto is up +38% from the prices of early February and +153% compared to prices a year ago.
The hype of crypto investors is clearly visible, simply by looking at the “Fear And Greed Index” chart from Alternative.me, which currently shows a value of 82 out of 100.
The White House proposes a 30% tax on electricity used for BTC mining
While the whole world is in fibrillation for the positive effects on the market resulting from Bitcoin spot ETFs, there are those who still find a way to oppose innovation by citing the classic story of pollution triggered by the practice of cryptocurrency mining.
We must remember that feeding the Bitcoin network is very expensive in terms of hashrate, and indirectly also in terms of CO2 emissions, but the situation is improving over the years as mining operators are increasingly incentivized (both economically and socially) to use renewable energy sources.
Anyway the White House in the United States seems concerned about the negative implications for the environment resulting from the constant demand for electricity to power the machines that keep the Bitcoin network operational, and proposes a tax on this activity.
In particular, we see how, according to what was highlighted in a report by Charles Gasparino of Fox Business, the official residence of the USA President would have declared to want to approve a 30% tax for those who use electricity for mining.
There is a new proposed law on the table, called Digital Asset Mining Energy (DAME), which would address the “economic and environmental cost” of Bitcoin mining.
Gasparino has observed that in a moment like this where the enthusiasm in the market is very high and there are many speculations on the rise for BTC, even the echo of detractors of the cryptocurrency is amplified at a media level.
Although it is not news that the White House opposes Bitcoin and its cryptographic roots, it is clear that in a situation like this certain words could be fuel for the upcoming government discussions.
Experts indeed predict that soon there will be an attempt to further regulate the sector, establishing maximum thresholds for Bitcoin mining and setting precise rules to minimize the impact of fossil fuel combustion.
For now, the goal of DAME is to “make cryptocurrency miners pay the costs they impose on others”, while waiting for new, more sustainable solutions to be found, both for the environment and for the miners.
Meanwhile, the renewable energy component in the Bitcoin Power Grid is increasing, and according to data recently presented by GreenminingDAO, the latter has reached a 56% share compared to the total mining operations.
Bitcoin is becoming more and more eco-friendly and it seems that it could soon make the big leap and become ESG-compliant, if more miners decide to switch to renewable energy.
