Massive government spending accelerating crypto adoption: Sen. Cynthia Lummis

Senator Cynthia Lummis said that inflation and massive government spending is accelerating the adoption of digital assets.

Republican Senator and Bitcoin proponent Cynthia Lummis said that massive government spending is accelerating crypto adoption.

Lummis made the comments while sharing an interview she did with “Varney & Co” on the Fox Business cable network on July 29, in which she called for a crypto regulatory sandbox and support to attract Bitcoin miners to set up in US states.

On Twitter she stated that “big gov’t spenders are (accidentally) doing far more to accelerate the adoption of digital assets than I am,” and asserted that the debasement of the U.S. dollar is driving citizens to store value in digital assets such as Bitcoin. Not that this was necessarily a good thing:

“BUT spending America deeper into a hole is a stupid, inflationary & altogether undesirable way to drive ppl to digital assets.”

“I want USD to continue as the world’s reserve currency. We need to reign in spending & support financial innovation on US soil,” she added.

During the cable TV interview, Lummis gave her thoughts on the July 27 hearing held by the Senate Banking Committee regarding the risks of crypto and offered views on the regulatory landscape moving forward.

The Senator emphasized that the first step should be “good solid definitions” that are agreed upon in legislation and called for  “a regulatory sandbox where everyone understands the rules, but innovation can still occur unrestricted.”

Lummis stated that “we wanna make sure that Bitcoin can continue to serve as a good store of value,” and she appears view the asset primarily in that way. However, she did also note that if the U.S. were to follow El Salvador’s route and make BTC legal tender, it would need to be regulated under the bank secrecy act, anti-money laws and in a way that it can be “ferreted out” if it’s used illegitimately.

The Bitcoin proponent also said she wants to see the U.S. welcome and support crypto miners that are flocking to the country following the Chinese mining ban:

“We wanna make sure that these miners […] can come to places like Pennsylvania, Texas, Wyoming and elsewhere. Where they can get the energy to mine it and then once it’s produced that it can be on the blockchain in a way that enhances the non-fiat currency advantages that cryptocurrency has.”

Related: Law professor calls for crypto mining regulation during US Senate hearing

Lummis is a Bitcoin hodler who previously stated that she was excited to buy the dip in June, and has advocated for holding BTC as part of a retirement diversification strategy. However, her pro-crypto sentiments were not shared by Democrat senator Sherrod Brown and others during the Senate Banking Committee’s recent hearing.

“After a decade of experience with these technologies, it seems safe to say that the vast majority haven’t been good for anyone but their creators,” Brown said in his opening statement.

“They claim to enable ‘transparency.’ Their backers talk about the ‘democratization of banking.’ There’s nothing ‘democratic’ or ‘transparent’ about a shady, diffuse network of online funny money.”

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Bitcoin price falls under $33K, but on-chain data hints at BTC accumulation

Signs of BTC accumulation begin to emerge as the network’s hashrate rises and exchange outflows increase in July.

As the pressures placed on the market by China’s cryptocurrency crackdown begin to subside and the Bitcoin (BTC) hashrate starts to show signs of recovery, traders are now focused on how the price will be affected by this week’s unlocking of more than $550 million worth of Grayscale’s GBTC shares.

Data from Cointelegraph Markets Pro and TradingView shows that the early morning downtrend in BTC on July 12 continued into the afternoon as the price of BTC dropped below the $33,000 support level after bears took control of the market.

BTC/USDT 4-hour chart. Source: TradingView

Grayscale attracted further attention on Monday after various media reported that the firm has publicly filed three Form 10 registration statements with the United States Securities and Exchange Commission (SEC).

This brings the number of publicly reported trusts managed by Grayscale to five, with the trusts for Bitcoin Cash (BCH), Ethereum Classic (ETC) and Litecoin (LTC) joining the previously filed trusts for Bitcoin and Ether (ETH).

Bitcoin hashrate shows signs of recovery

China’s crackdown on Bitcoin mining resulted in a 55% decline in the network hashrate as BTC mines were shut down across the country and operations moved overseas.

According to a recent report from Glassnode, roughly 29% of the lost hashpower has now come back online as a result of Chinese miners successfully relocating hardware while “previously obsolete hardware has been dusted off and found a new lease on life.”

Bitcoin mean hash rate. Source: Glassnode

After nearly a month of selling from miners, the Miner Net Position Change metric now shows that they are back in accumulation mode indicating that “the sell-side pressure coming from offline miners is more than offset by accumulation by the operational miners.”

Further evidence for a decrease in selling can be found in the exchange flow data for BTC, which has seen a larger amount of BTC withdrawn from exchanges than deposited over the past two weeks.

Bitcoin all exchanges netflow. Source: CryptoQuant

As a result of the increased outflows, the amount of Bitcoin reserves held across all exchanges fell by more than 16,100 BTC between June 28 and July 11.

Bitcoin all exchange reserves. Source: CryptoQuant

From a macro perspective, many interpret this as a bullish development for Bitcoin as token holders appear to be withdrawing BTC to put into long-term storage as the market awaits the next significant move higher.

Related: Bitcoin dips below $33K as shorts spike, trader warns of ‘violent’ BTC price squeeze

Altcoins fall under pressure

Altcoins as a whole fell under pressure on Monday as the pullback in BTC led to weakness across the market.

Daily cryptocurrency market performance. Source: Coin360

As the sell-off intensified into the afternoon the price of Ether (ETH) fell to the $2,000 support level after traders rushed for the exits.

While the majority of the market was in the red for the day, there were several projects that managed to rise above the noise and post gains on July 12, with Metal (MTL) putting up a gain of 18% while Revain (REV), Stratis (STRAX) and Injective Protocol (INJ) gained 12%

The overall cryptocurrency market cap now stands at $1.354 trillion and Bitcoin’s dominance rate is 45.5%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Cambridge and IEA data shows bitcoin carbon intensity peaked last year

Worst case projections seem to suggest that bitcoin emissions will be down by more than two-thirds in five years.

According to publicly available data from the University of Cambridge Centre for Alternative Finance and the International Energy Agency, or IEA, bitcoin (BTC) carbon emission intensity may have already peaked.

The environmental impact of bitcoin’s electricity usage is a favorite talking point of its critics and journalists on the crypto beat. But taking in the available data, Hass McCook, a retired chartered professional engineer, reckons bitcoin’s carbon emissions “have already peaked a few months ago.”

McCook unpacked the data and defended that conclusion in a guest post on Bitcoin Magazine’s website Friday:

“From the above, it would appear that Bitcoin’s emissions peaked a few months ago, and thankfully, with the banning of Bitcoin mining in China, has commenced its aggressive march down to zero emissions. It is expected that in the worst case, emissions from Bitcoin in five years will be less than a third of its emissions today, and in 10 years, Bitcoin will emit nothing at all.”

BitAll’s bitcoin mining infrastructure was created over the last 12 years, giving miners the “second mover advantage” to avail their operations of the latest, most sustainable green tech for electricity to mine bitcoin.

Data from the Cambridge Bitcoin Electricity Consumption Index suggests that global bitcoin mining has a “grid intensity” (carbon emissions per unit of electricity consumed) that’s cleaner then the average of the entire global power grid. The world average is 463 grams of CO2 emitted per kilowatt hour. Bitcoin miners average 418 grams.

Meanwhile, world grid intensity peaked sometime last year, if the energy economy stays on track with projections for 2021 and subsequent years, according to data from the IEA. 

By design, computers running Bitcoin Core to validate and place new blocks on the bitcoin blockchain are required to use some electricity to correctly guess the input for a SHA-256 encrypted hash.

SHA-256 (short for Secure Hashing Algorithm) is a one-way hash function published by the U.S. National Security Agency in 2001, and an integral part of the bitcoin design architecture. Computers test the guess by entering it into the algorithm and seeing if it matches the hash on the previous block. The first node to guess the hash correctly gets to place the next block of transactions and award the bitcoin miner in newly-created bitcoin.

This proof-of-work, or PoW, mechanism qualifies nodes to participate on the network by forcing miners to venture electricity costs, and risk losing their operating costs for no profit if their computer attempts to cheat the network’s rules.

Some Bitcoin critics, and even proponents, say that its energy consumption poses environmental risks, and may contribute to human-caused global warming. Tesla CEO Elon Musk famously rattled bitcoin’s price this year by announcing the electric carmaker would accept BTC for Teslas, then backpedaling.

Musk said Tesla would begin accepting bitcoin again when 50% or more of miners’ energy usage is reasonably confirmed to be from “clean energy” sources.

McCook says most of the bitcoin emissions claims are overblown:

“One of the most widely debunked, yet still widely referenced claims of ‘academia’ is that Bitcoin will single-handedly increase the planet’s temperature by 2 degrees Celsius.”

A Bitcoin Mining Council survey report out this week estimates a 56% sustainable power mix for Q2 2021 in bitcoin mining operations globally based on respondents’ answers.

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Celsius users to receive yield from its $200M Bitcoin mining investment

“There’s nothing better than building a factory that makes Bitcoin,” said Celsius CEO, Alex Mashinsky.

Alex Mashinsky, the CEO of centralized crypto money market Celsius, has revealed that a share of profits from the company’s recent $200 million investment into Bitcoin mining infrastructure will be redistributed back to depositors.

Speaking to Cointelegraph, Mashinsky stated the firm’s mining expansion has added a fifth stream of yield generation for its crypto depositors — alongside lending funds to institutional investors, leveraging DeFi protocols, retail lending, and market making on centralized exchanges.

In early June, Celsius announced it had invested more than $200 million into North American Bitcoin mining infrastructure and positions in Core Scientific, Rhodium Enterprises and Luxor Technologies.

“A big chunk of our community owns Bitcoin and they want to be paid in Bitcoin,” he said, adding: “So, there’s nothing better than building a factory that makes Bitcoin.”

“By creating a mining business we are guaranteeing that we can pay our community what we owe them, which is interest in Bitcoin.”

Celsius was founded by the serial entrepreneur in 2017, with the platform offering yield on deposits for more than 40 digital assets including Bitcoin, Ethereum, and stablecoins.

Celsius’ mining expansion comes as Mashinsky notes Bitcoin yields are shrinking amid the growth of DeFi, with numerous protocols offering interest in the form of BTC on Bitcoin deposits. Celsius doesn’t charge any management fees from users, but instead takes 20% or more of the profits generated.

The company is not alone looking to invest in North America’s mining sector, with analysts expecting the continent will see an influx of miners who have been dislocated by China’s recent crackdown on the sector.

Mashinsky is unsurprised by China’s regulatory moves, characterizing the clampdown as a move to eliminate competition and protect its emerging central bank digital currency (CBDC).

Ultimately, Celsius’ CEO argues the Chinese miner exodus will prove to be beneficial for the decentralization of the Bitcoin network, stating:

“Moving a lot of the miners out of China is definitely helping Bitcoin get decentralized even more. So it’s a good thing for Bitcoin, just not necessarily a good thing for the citizens of China.”

Related:  Cointelgraph Magazine — The adventures of the inventive Alex Mashinsky

The CEO has bullish expectations of Bitcoin’s price for the rest of the year, asserting that the price will tag heights of “anywhere between $140,000 and $160,000.”

However, he believes the markets will peak before 2022, asserting Bitcoin will “close the year below $100,000” after sellers step in to take profits in the six-figure price range.

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Crypto miner claims all major Yunnan operations shut down in advance of CCP anniversary

It’s unclear if the shutdowns are due to orders passed down from above or the result of China’s announced regulatory crackdown on crypto miners.

Reports alleged that cryptocurrency miners in China’s Yunnan province may be out of commission for a day if not longer due to the Chinese Communist Party’s 100th anniversary celebration this week.

According to Kevin Zhang, the vice president of mining infrastructure company Foundry Services, all major Bitcoin (BTC) mining farms in Yunnan have been shut down as of today. Zhang said he personally knew of at least two crypto mining sites in the southwestern region that had received orders to cut power.

The shutdowns are purportedly due to the impending Chinese Communist Party, or CCP, celebrations, which occur every year on July 1. Due to this year’s anniversary being a centennial, authorities seem to have taken stronger measures to ensure less pollution — China ranks as the 14th worst country in terms of air quality — traffic, and political demonstrations. Major industries including coal mining and steel production will reportedly be shut down for up to a week in an attempt to reduce urban smog and prevent accidents.

However, it’s unclear if the CCP anniversary is directly related to the shutdowns or Chinese crypto miners are responding to an ongoing regulatory crackdown. The State Council’s Financial Stability and Development Committee announced in May it would be curtailing BTC mining amid financial risk concerns. Several reports have surfaced since that time suggesting authorities are enforcing crypto mining bans in regions including Yunnan, Xinjiang, Inner Mongolia and Qinghai.

Related: China crackdown shows industrial Bitcoin mining a problem for decentralization

While some companies have said the mining ban is driving them to other provinces within China, a few may leave the country entirely. Many experts in the crypto space expect the regulatory crackdown will push mining firms to relocate to Texas, with abundant renewable energy and a highly deregulated power grid.

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