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- Amidst discussions about banning Bitcoin mining in Paraguay, one Senator has praised the industry as a “gift from heaven” to the economy.
- Bitcoin mining is a passive method of earning BTC which could turn hugely profitable after the recent halving.
Bitcoin mining remains a contentious topic for a majority of governments around the world. While some have recognized the potential to spur economic growth, others raise environmental concerns. Paraguay is among the countries struggling with the decision to either ban mining or keep growing the industry.
At the heart of the debate is figuring out how Paraguay can spend its excessive electricity. The surplus electricity from the large Itaipu dam is being sold to Brazil, but with the growth of Bitcoin mining, this could lead to higher prices. Senator Salyn Buzarquis has offered a different opinion, calling for growth in the mining industry as a means to grow the economy.
The Senator reveals that the Department of Commerce “is studying the economic benefits that selling our energy surplus to the crypto mining industry can have.” Buzarquis continues to add “that crypto mining companies can be a short- or medium-term solution to sell our energy surplus at market prices.” Selling to miners would generate higher returns than selling to Brazil. While Brazil buys at $10 per megawatt hour for the excess energy, miners can pay between $40 and $51 per megawatt hour.
HOY APROBAMOS EL PROYECTO DE DECLARACIÓN POR LA CUAL EL SENADO DEL #Paraguay APOYA LAS INVERSIONES EXTRANJERAS EN INFRAESTRUCTURA E INSTA AL @MIC_PY A ESTUDIAR LAS VENTAJAS ECONÓMICAS DE VENDER NUESTRO EXCEDENTE ENERGÉTICO A LA INDUSTRIA DE LA #CryptoMining #BITCOIN pic.twitter.com/XPF94zWKK2
— Salyn Buzarquis (@SalynBuzarquis) April 10, 2024
Coordinating his arguments with ANDE, the country’s national energy administration, which distributes electricity from the dam, they reveal that the mining industry generates $100 million a year. Furthermore, the industry brings business to local companies such as manufacturers of cables, transformers, refrigeration, and more.
The Senator expects revenue to keep increasing, projecting $125 million in 2025. This would represent $73 million for ANDE. He adds that this will help avoid bankruptcy and help develop the electricity infrastructure, he notes:
This revenue is what ANDE needs to avoid going bankrupt and to be able to invest more in infrastructure without increasing electricity prices for people in Paraguay.
It is important to note that the Bitcoin network just completed its fourth Bitcoin mining which saw the BTC reward slashed from 6.25 BTC to 3.125 BTC. Historically, this has led to a shakeup, driving out small miners and favoring larger, more efficient operations.
With an anticipated supply shock and rising demand, BTC prices normally take an upward trajectory. This could be key for Paraguay and its mining ambitions. The next few months could usher in a new all-time high with expert predictions falling between $100,000 and $250,000.
At the time of writing, BTC is exchanging for $64,370 after a 1% surge in the last 24 hours. This has seen the world’s largest cryptocurrency recuperate some of its weekly losses as it begins to rebuild bullish momentum. While technical indicators point to a bullish outlook, investors are optimistically cautious about the coming weeks.