Bitcoin Mining has come under scrutiny again as US regulators are now analyzing its consumption of electricity. The administration of US President Joe Biden issued an “emergency collection of data request” related to the power consumption of Bitcoin miners. The move has caused uproar as crypto enthusiasts consider the decision to be a Bitcoin against the US currency conflict.
US EIA to collect data on electricity consumption by Bitcoin miners
The Energy Information Administration (EIA) is scheduled to begin the immediate data collection this coming week. This comes after the Biden administration approved an emergency investigation into the amount of electricity used by Bitcoin and cryptocurrency miners.
As part of an emergency data collection request approved by the Office of Management and Budget on January 26, people who mine Bitcoin will have to respond with information about how much energy they use. This will include people using powerful computers to verify transactions and maintain the blockchain in exchange for freshly minted coins.
Dollar VS Bitcoin: Where Is Investor Traction Going?
According to Forbes, supporters of Bitcoin are becoming increasingly fervent in their belief that the US currency is about to collapse. The concern stems from the massive increase in the number of dollars and debt caused by the COVID-19 pandemic. As of today, the total debt in the US stands at a high of $34.1 trillion. Markets are worried that the current investigation into Bitcoin mining could be just another way for the US government to impose harsh regulations in the future.
Is Dollar Uncertainty Good News for Bitcoin?
CoinGape previously reported that in the event of a debt default in 2025, the Bitcoin market could be at risk. Historical data suggests that Bitcoin prices have never fared well in volatile markets and uncertain macroeconomic conditions. If the debt default were to occur in 2025, a decline in bitcoin values could be caused by panic selling and large trader liquidations.
A similar situation previously occurred in early 2020. The pandemic-related slowdown in economic activity and a crash in the stock market subsequently reduced the value of cryptocurrencies. At least the consensus in the market is that a recession could cause a significant cryptocurrency sell-off and price drop.
On the other hand, the uncertainty surrounding debt and the value of the US dollar could also create a potential rise. Market players may choose to keep their money away from centralized authorities due to the possibility of central banks engaging in debasement. In this case, the market for digital assets may rise due to a decentralized crypto appeal.
Jack Mallers, founder and CEO of Strike, explained in an interview a possible alternative in this dire situation. He says amid the debt equation, local government currencies may depreciate. This may be more common if the current debt trend continues at its current rate. Maller claims this could force investors into a fiat debasement and cause a collapse in purchasing power. He feels that in such a scenario, people need a physical asset that is decentralized and that Bitcoin is the only option at the moment.
Where will crypto voters lean in this election?
Biden administration has time and confirmed their belief that they may not be that big of a crypto supporter. The data collection also indicated that the current US government may try to promote the dollar over any other digital currency. While Bitcoin mining’s power consumption tends to be a debatable topic, the data collection comes right before the election. This fan worries that a Biden 2.0 administration might not favor the digital currency world.
Voters using cryptocurrency will be very important in this election. One in five Americans now own digital assets, according to Forbes. 52 million people, to be exact. Despite strict enforcement and a certain aversion to virtual currencies, Forbes also noted that 22% of respondents who own cryptocurrency identified as Democrats. The rest 18% as Republicans, and 22% as independents, based on survey data from Coinbase and Morning Consult.
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