Globally, Bitcoin miners use more electricity that the whole of Austria. Although the cryptocurrency is currently valued at $11,000, the electricity bill for a single coin can vary significantly – from $26,000 in South Korea to $4,000 in the US. Since this energy accounts for between 90-5% of bitcoin mining costs, location plays a critical role in determining profitability for the cryptocurrency’s miners. As this podcast explores, however, Bitcoin is designed with such inefficiency in mind in order to prevent easy mining flooding the market with coins.
Why does this matter? On top of concerns around money laundering and illegal cross-border flows, bitcoin investors now also need to worry about crypto markets being caught up in tougher environmental regulations. China has already shut down some bitcoin miners on excessive electricity usage. Meanwhile, the EU is reviewing its energy policy which could target these markets.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)
For access to our Slack Chat Room, where we discuss all things markets with our researchers and subscribers