thecoinrepublic.com
- Ted Cruz says Texas is suitable for Bitcoin mining.
- Many crypto mining stocks have lost around 90% value since the peak last year.
- Bitcoin was trading at the market price of $17,158 at the time of writing.
Bitcoin Mining Can Help In Monetizing Energy
Ted Cruz, Texas-based US Senator, stated that he is a Bitcoin mining fan and points out why his state is perfect for cryptocurrency mining. He offered his views during the Texas Blockchain Summit 2022 arguing about how the sector can be crucial for the country’s development. According to a news website, he said that it can help in monetizing the energy produced by gas extraction and energy storage.
He called the cryptocurrency mining supply excess “very beneficial” and pointed out that his state’s abundant and cheap energy renders it a perfect location for the sector. He added that he is a fan of the crowned asset as the “authorities cannot control it”.
The bear market has delivered a lot of financial damages to the investors as well as the miners this year. According to an analysis by a Hasrate Index analyst, Bitcoin mining bear market has a lower than $0.25/kWh sustained period revenue. 2018 was among the worst phases for BTC mining which spanned for around a year where the market registered revenue as low as $0.12 kWh.
In 2021, when the bulls were on fire in the crypto sphere, Bitcoin mining stocks peaked to more than $17 Billion in cumulative value. The bull market caught the eye of a lot of investors that year, adding a boost to reach the top since November 2020. Now the good times are gone and several crypto mining stocks are down by a whopping 90%.
According to Fortune, BTC miners acquired a heavy debt which led to the crypto bloodbath in 2022. CleanSpark, a Bitcoin mining company, is among the organizations that took only a handful of debt unlike others in the market. The company has sold 70% of the Bitcoin it had mined from its operations.
The report says that during the month’s start, the company spent around $6 Million on 3,843 miners at an average cost of $1,500. Grayscale, a digital currency asset management firm, wanted to buy the miners at a low cost but backed out due to the unreliable economic conditions at its parent organization.
Guzmon Pintos, co-founder of Luxor, explained the whole scenario in a simple way. He said that, “The mining firms were incentivized to load up with debt to ‘pump their stock’.” Adding that “More operations mean more Bitcoin and greater revenue, and ultimately the higher stock value.”
People have criticized Bitcoin mining for being hazardous to the environment due to the asset’s Proof-of-Work (PoW) mechanism. Recently, Ethereum, the second largest crypto asset, shifted their blockchain operations to Proof-of-Stake consensus algorithm to reduce the carbon emissions from their ecosystem by around 99%.