Per a report from the Cambridge Center for Alternative Finance (CCAF), fossil fuels have been the primary energy source for BTC mining since the start of the year. The CCAF recently updated its Cambridge Bitcoin Electricity Consumption Index (CBECI). Its study claims that 62% of all the energy the leading token has consumed so far consists of coal-based energy. BTC’s Energy-Intensive Mining Bitcoin employs the proof-of-work consensus mechanism to create new tokens and validate transactions on the blockchain. The PoW…
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Bitcoin May Benefit From the Current Economic Challenges in the Long-term
People usually compare the cryptocurrency market to the traditional market. Bitcoin is volatile thereby making it a challenge for the investors in equity or other asset class. In spite of the volatility, Bitcoin and cryptocurrencies have been able to attract institutional investors over the previous 12 to 18 months.
Nevertheless, the uncertainty that reflects in the traditional market has contributed to the achievement.
On May 5, Kevin Kelly of Delphi Digital featured in the recent episode of Block Crunch. He noted that Bitcoin enjoyed the macro-economic backdrop. Kelly said the cryptocurrency market has often reflected the ups and downs encountered in the traditional market.
This happened recently in March when people panicked and the market crashed. However, when the traditional market was able to recover, the recovery of the cryptocurrency market followed.
Bitcoin emerged about 10 years ago and some individual already consider it a digital gold with investors taking it as a safe haven. In spite of the decline and recovery of all asset classes recently, Bitcoin incurred more rallies in line with Gold.
Based on the features of Bitcoin, Kelly thinks that it can be regarded as a non-sovereign, digitally native, and hard cap supply asset, belonging to the category of a safe haven asset, in the long-term.
Nevertheless, market participants have been seeing a correlation between Bitcoin and other asset classes, but as time passes, it may disappear with risk-assets. As authorities continue to pump money into the economic system, it will ultimately bring about inflation and people could consider Bitcoin because of its digital gold narrative. As the correlation fades, it will be evident in Bitcoin and Altcoins markets.
Based on the robust correlation between Bitcoin and Ethereum, investors may be further attracted to Ethereum and a variety of projects such as Decentralized Finance (DeFi) and DApps in the cryptocurrency domain.
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