Ethereum extended rally and traded to a new all-time high above $4,800 against the US Dollar. ETH could continue to rise above $4,900 and $5,000 in the near term.
Ethereum gained pace above the $4,650 and $4,750 resistance levels.
The price is now trading above $4,750 and the 100 hourly simple moving average.
There is a key bullish trend line forming with support near $4,780 on the hourly chart of ETH/USD (data feed via Kraken).
The pair could extend its rally above the $4,850 resistance in the near term.
Ethereum Price Aims More Upsides
Ethereum started a fresh increase above the $4,550 and $4,600 resistance levels. ETH gained pace above the $4,650 resistance zone and the 100 hourly simple moving average.
The price even climbed above $4,750 and traded to a new all-time high. It traded as high as $4,822 and is currently consolidating gains. It is now trading well above the 23.6% Fib retracement level of the upward move from the $4,577 swing low to $4,822 high.
It is also trading well above $4,750 and the 100 hourly SMA. Besides, there is a key bullish trend line forming with support near $4,780 on the hourly chart of ETH/USD.
An immediate resistance on the upside is near the $4,820 level. The next major resistance is near the $4,850 level. A break above the $4,850 level may possibly spark a fresh rally. The next key resistance is near the $5,000 level. Any more gains could lead the price towards the $5,200 level in the near term.
Dips Supported in ETH?
If ethereum fails to climb above the $4,820 and $4,850 resistance levels, it could start a downside correction. An initial support on the downside is near the $4,800 level and the trend line.
The first major support is near the $4,750 level. The next major support is also near the $4,700 level. It is close to the 50% Fib retracement level of the upward move from the $4,577 swing low to $4,822 high. Any more downsides could lead the price towards the $4,620 support and the 100 hourly SMA. The next major support for the bulls is near the $4,550 level.
Technical Indicators
Hourly MACD – The MACD for ETH/USD is slowly losing pace in the bullish zone.
Hourly RSI – The RSI for ETH/USD is now above the 60 level.
Will BlockFi be the one? The rumors are flying, apparently, the U.S. Securities and Exchange Commission will approve a spot Bitcoin ETF soon. With that in mind, the news that crypto lending platform and investment service BlockFi just filed to get one approved was met with suspicion and excitement by the Bitcoin community. Unlike the Bitcoin Futures ETF, a spot one will require the company sponsoring it to buy a huge amount of Bitcoin. This will definitely affect the price. However… BlockFi?
Last year, hackers targeted BlockFi and stole sensitive user data including their clients’ activity history. To add insult to injury, the hackers used a simple SIM swap to breach their security, and the company didn’t disclose the hack until days after it happened. More recently, regulators from five states accused the controversial lending platform of violating security laws with their BlockFi Interest Account product. In a statement regarding the issue, the company said:
“BlockFi’s BIAs have been the subject of recent activity by securities regulators in New Jersey, Texas, Alabama, Vermont and Kentucky, and we are in active dialogue with these regulators. We believe that our products and services are lawful and appropriate for crypto market participants, and we remain steadfast in our commitment to protect consumers’ rights to earn interest on their crypto assets.”
In any case, past performance doesn’t guarantee future results. And BlockFi could score big if they’re the chosen one. The first spot Bitcoin ETF is expected to shatter all kinds of records, but let’s not get ahead of ourselves.
BTC price chart for 11/09/2021 on Oanda | Source: BTC/USD on TradingView.com
What Do We Know About BlockFi’s Version Of A Bitcoin ETF?
Not much, actually. The project is a joint venture with investment management firm Neuberger Berman. If approved, it will trade on the New York Stock Exchange. It will “reflect the performance of bitcoins held by the Trust, less the Trust’s expenses and other liabilities.” Yes, the registration statement actually says “bitcoins,” but let’s give them a pass for now. What else does the document reveal? Well…
“Barring a liquidation or extraordinary circumstances, the Trust will not purchase or sell bitcoin directly, although the Trust may direct the Custodian to sell bitcoin to pay certain expenses. Instead, when the Trust sells or redeems its Shares, it will do so in “in-kind” transactions in blocks of [] Shares (a “Creation Basket”) based on the quantity of bitcoin attributable to each Share (…). Because the creation and redemption of Creation Baskets will be effected in in-kind transactions based on the quantity of bitcoin attributable to each Share, the quantity of bitcoin in Creation Baskets so created or redeemed will generally not be affected by fluctuations in the value of bitcoin.”
In any case, is not even close to guaranteed that BlockFi will win the coveted first spot. The amount of ETF fillings regarding Bitcoin is getting ridiculous, actually.
Who’s Next On The SEC’s Bitcoin ETF List?
The list Bloomberg Intelligence’s James Seyffart provides shows 21 hopeful spot Bitcoin ETFs and even more derivatives-based ones. That includes the BlockFi Futures ETF that the company filed for last month. Here’s the list.
Here's the current list of #Bitcoin and Crypto ETF filings with the SEC. Next big date is still 11/14/21 for VanEck's spot Bitcoin ETF. It will be either approval or denial from SEC — no more delays. https://t.co/Z8phpVlsOKpic.twitter.com/g9ayoibmQN
According to the expert, the “Next big date is still 11/14/21 for VanEck’s spot Bitcoin ETF. It will be either approval or denial from SEC — no more delays.” Will VanEck be the chosen one? We’ll have to wait and see, but Seyffart feels it won’t be. He tweeted, “We fully expect a denial based on recent comments from SEC/Gensler. Would be shocked if VanEck’s filing is approved (despite believing it *should* be approved). BUT, the denial letter should give us insight into SEC’s current views/opinions.”
Chances are all the approved spot Bitcoin ETFs will make tons of fiat money, but the first-mover advantage in a product as anticipated as this one is worth millions of Dollars. Billions, even.
Things are getting serious in Fiat-land. The DarkSide saga continues with a press release from the U.S. Department of State that offers up to $10M for “information leading to the identification or location of any individual(s) who hold(s) a key leadership position in the DarkSide ransomware variant transnational organized crime group.” Plus, up to $5M for “information leading to the arrest and/or conviction in any country of any individual conspiring to participate in or attempting to participate in a DarkSide variant ransomware incident.”
Interesting. As you probably remember, this group’s software was at the heart of the Colonial Pipeline hack and ransomware attack. It was never clear who was responsible since DarkSide offers a ransomware-as-a-service platform, but the U.S Department of State is having none of that. They clearly declare that:
“The DarkSide ransomware group was responsible for the Colonial Pipeline Company ransomware incident in May 2021, which led to the company’s decision to proactively and temporarily shut down the 5,500-mile pipeline that carries 45 percent of the fuel used on the East Coast of the United States.”
What Is DarkSide, Exactly?
To do this right, we have to quote the people in the know. According to reporter and computer security expert Brian Krebs:
“First surfacing on Russian language hacking forums in August 2020, DarkSide is a ransomware-as-a-service platform that vetted cybercriminals can use to infect companies with ransomware and carry out negotiations and payments with victims. DarkSide says it targets only big companies, and forbids affiliates from dropping ransomware on organizations in several industries, including healthcare, funeral services, education, public sector and non-profits.”
We’re not remotely suggesting that what they are doing is right. Ransomware attacks are a crime. And they’re affecting the whole crypto space by using our coins for nefarious purposes.
That being said, there’s obviously more to this story.
Where Does Ransomware Come From, Exactly?
We hate to do this, but the core of ransomware software comes directly from the NSA.
“The hackers are able to use tools stolen from the NSA, like the Eternal Blue malware, to encrypt all the files on an infected machine, and then they demand a ransom, usually in Bitcoin, for the keys to decrypt the data.”
That means as much as each one wants it to mean. A question remains, though. Why use Bitcoin for this? Each and every transaction is forever recorded in the blockchain. What criminal wants to leave an unbreakable trail like this one?
BTC price chart for 11/04/2021 on Bitstamp | Source: BTC/USD on TradingView.com
Will The Reward Work? Will They Get DarkSide With This?
Let’s not kid ourselves, $10M is a lot of money. The Department of State is not playing around. However, DarkSide is just an intermediary, they provide the software for others to use. Or so it seems. Would an arrest stop ransomware as a whole? Probably not. But it would send a strong message.
How effective are these rewards historically? The press release says:
“More than 75 transnational criminals and major narcotics traffickers have been brought to justice under the TOCRP and the Narcotics Rewards Program (NRP) since 1986. The Department has paid more than $135 million in rewards to date.”
Bitcoin price started a fresh rally above $65,000 against the US Dollar. BTC is showing positive signs and it could rise further towards $70,000.
Bitcoin started a fresh increase above the $62,500 and $63,500 resistance levels.
The price is now trading above $65,000 and the 100 hourly simple moving average.
There was a break above a major bearish trend line with resistance near $61,550 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could accelerate further higher once there is a close above the $66,000.
Bitcoin Price Gains Pace
Bitcoin price remained well bid above the $60,000 support zone. As a result, BTC started a fresh rally above the $62,500 and $63,500 resistance levels.
The bulls even pumped the price above the $65,000 level and the 100 hourly simple moving average. Besides, there was a break above a major bearish trend line with resistance near $61,550 on the hourly chart of the BTC/USD pair.
The pair gained pace for a move above the $65,500 level. A high is formed near $65,681 and the price is now consolidating gains.
Bitcoin is trading well above the 23.6% Fib retracement level of the upward move from the $60,129 swing low to $65,681 high. On the upside, an immediate resistance is near the $65,500 level. The first major resistance is near the $66,000 level.
A clear break above $66,000 resistance may possibly call open the doors for a fresh rally. The next major resistance sits near the $68,500 level. Any more gains might lead the price towards the $70,000 level.
Dips Limited in BTC?
If bitcoin fails to clear the $66,000 resistance zone, it could start a fresh downside correction. An immediate support on the downside is near the $64,500 level.
The first major support is now forming near the $63,000 level. It is near the 50% Fib retracement level of the upward move from the $60,129 swing low to $65,681 high. A clear close below the $63,000 support could open the doors for a move towards the $62,500 level. The main breakdown support is near $61,200 and the 100 hourly SMA, below which the price could accelerate losses.
Technical indicators:
Hourly MACD – The MACD is slowly losing pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now in the overbought zone.
Major Support Levels – $64,500, followed by $63,000.
Major Resistance Levels – $65,500, $66,000 and $68,500.
As demand for Ethereum, the most used blockchain network, has surged this year, other projects have emerged in an attempt to compete. Among them is Solana, a blockchain with a native cryptocurrency called SOL.
“Solana is the leading Ethereum competitor,” Matt Hougan, chief investment officer at Bitwise Asset Management, tells CNBC Make It. “I wouldn’t put all my chips on it, but I’m a big fan.”https://products.gobankingrates.com/pub/84d1cf40-924a-11eb-a8c2-0e0b1012e14d
Hougan isn’t alone — the overall market has shown support for Solana, too. This year, SOL is up nearly 17,000%, according to CoinGecko. Now the fifth-largest cryptocurrency by market value, SOL hit an all-time high of nearly $250 on Thursday, and currently, it has a market cap of over $70 billion.
“A lot of the fastest-growing applications of crypto technology have been built on Ethereum and rely on the Ethereum blockchain to function,” Hougan says. “If you’re investing in Solana, you’re betting that its technical sophistication will help it leapfrog Ethereum.”
Though Solana has been especially buzzy lately, it’s important to research and understand the risks before investing. After all, financial experts generally deem all cryptocurrencies to be risky, volatile and speculative investments.
What’s Solana?
Solana officially launched in March 2020. Its founder, Anatoly Yakovenko, designed Solana to support smart contracts and the creation of decentralized applications, or dapps.
The blockchain operates on both a proof of history (PoH) and proof of stake (PoS) model. PoS allows validators to verify transactions according to how many coins they hold, while PoH allows for those transactions to be timestamped and verified more quickly, Yakovenko wrote in the Solana white paper.
In combination, “Solana can achieve more transactions per unit of time and has significantly lower fees,” compared to Ethereum, says Sam Trabucco, co-CEO of quantitative cryptocurrency trading firm Alameda Research.
Currently, Ethereum operates on a proof of work (PoW) model, where miners must compete to solve complex puzzles in order to validate transactions.
How does it compare to Ethereum?
Although Ethereum is older and more prominent, “Solana is a viable competitor,” says Brett Harrison, president of cryptocurrency exchange FTX US.
One reason is because Ethereum “is fundamentally limited in its capacity for global-scale applications due to the small number of transactions per second it can support,” Harrison says. Solana can support tens of thousands of transactions per second, while Ethereum can support roughly 13 transactions per second.
Solana also has “significantly lower fees,” Trabucco says. One of the main complaints about Ethereum is its frequently high transaction fees.
Ethereum still has its own advantages as well. “Ethereum has more users, more applications that already exist and more stability,” Trabucco says.
It also has a “massive ‘first mover’-adjacent advantage,” he adds, referring to the theory that the first to enter a market automatically has an edge over the competition.
Nonetheless, “I certainly think both likely have a place,” Trabucco says.
What are the risks?
Generally, financial experts warn to only invest as much as you can afford to lose in cryptocurrencies due to their significant risks.
Solana, in particular, has its own risks. First, it has appreciated substantially in a short period of time. Just like with other cryptocurrencies, the potential for large price swings should be considered and understood before investing. As quickly as it reaches a new high, it could go back down.
Critics also worry about Solana’s decentralization after it suffered a 17-hour outage in September, during which the network couldn’t process transactions. Solana developers later blamed something called “resource exhaustion,” Bloomberg reported.
All in all, “the risks are that [Solana] is competing with other technologically slick blockchains and blockchains with very large communities and established user bases,” Hougan says. “It’s like betting on a new and slick software company.”
AVAX price contemplates a retest of the $72.06 to $81.23 daily demand zone.
This buy opportunity will likely be followed by a 25% advance to set up an all-time high at $100.
A daily close below $72.06 will invalidate the bullish thesis.
AVAX price has been on a massive ascent for roughly 20 days and is currently hovering above a mix of crucial support floors. A bounce off of these levels is likely to trigger another quick run-up for the altcoin.
AVAX price to enter triple-digit territory
AVAX price action between September 7 and October 20 formed a bullish continuation pattern. In particular, Avalanche bulls triggered a 153% ascent between September 7 and September 23, known as a flagpole. This move was followed by a consolidation in the form of a descending parallel channel known as a flag.
A decisive daily candlestick close above the flag’s upper trend line at $57 constitutes a breakout, forecasting a 153% ascent to $130. This target is obtained by adding the flagpole height to the breakout point.
So far, AVAX price has rallied 56% and has a lot more to go. However, there is a good chance that Avalanche will retrace to the daily demand zone, ranging from $72.06 to $81.23. This move will allow the bulls to replenish for another leg-up.
In such a case, AVAX price will rally 25% to retest the 100% trend-based Fibonacci extension level at $100. A highly bullish case could see Avalanche bulls extend this uptrend to the next level at $130, constituting a 60% ascent.
AVAX/USDT 6-hour chart
On the other hand, if AVAX price fails to hold above $72.06, it will indicate a weakness among buyers and even invalidate the bullish thesis if the daily closing price goes below it.
Such a move is likely to trigger a further descent to the $60 support level.
Bitcoin’s (BTC) dominance has dropped from about 48% on Oct. 20 to 42.3% on Nov. 7 while the total crypto market capitalization has continued its northward journey. This indicates that the price action has shifted from Bitcoin to altcoins.
CryptoQuant CEO Ki Young Ju said that Bitcoin whales are selling but this has not resulted in the breach of the strong support at $60,000. He also pointed out that Bitcoin reserves across exchanges have continued to decrease, indicating strong appetite from buyers.
The majority of the market participants remain bullish on Bitcoin and anticipate a rally to $288,000 by the start of 2022, according to a survey conducted by PlanB.
Real Vision founder Raoul Pal also projected a bullish picture for cryptocurrencies in an interview on Nov. 3. He said the current bull run is unlikely to top out in December of this year and may extend to between March and June of the next year. Pal anticipates the possible launch of Ethereum 2.0 and the likelihood of an Ether (ETH) exchange-traded fund being green-lit in the first half of 2022 will attract institutional investors and trigger a massive rally.
In this bullish backdrop, let’s analyze the charts of the top-5 cryptocurrencies that may remain in focus and outperform in the short term.
BTC/USDT
Bitcoin broke above the bullish flag pattern on Nov. 2 but the buyers could not capitalize on this move and push the price above the overhead resistance zone at $64,854 to $67,000. This indicates the bears have not yet given up and are attempting to stall the up-move.
BTC/USDT daily chart. Source: TradingView
However, a positive sign is that bulls are aggressively defending the 20-day exponential moving average ($60,794). The buyers will make one more attempt to push the price above the overhead resistance zone.
If they can pull it off, the bullish momentum may pick up and the BTC/USDT pair is likely to rally toward the pattern target at $89,476.12.
This bullish view will invalidate if the price breaks and dips back into the flag pattern. The pair may then drop to the 50-day simple moving average ($54,883). The zone between the 50-day SMA and $52,920 is likely to attract strong buying support from the bulls.
BTC/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows the pair is range-bound between $63,732.39 and $59,500. The flat moving averages and the relative strength index (RSI) just above the midpoint indicate a balance between supply and demand.
If the price rebounds off the moving averages, the bulls will again attempt to propel the price above the overhead resistance zone between $63,732.39 and $64,270. If they manage to do that, the pair may retest the all-time high.
Conversely, a break below the moving averages could pull the pair to the strong support zone at $59,500 to $58,000. The bears will gain the upper hand if this zone is breached. The pair could then correct to $55,267.61.
DOT/USDT
Polkadot (DOT) soared and broke above the overhead resistance at $49.78 on Nov. 1. The RSI broke above the downtrend line, invalidating the negative divergence. This suggests the resumption of the uptrend.
DOT/USDT daily chart. Source: TradingView
The bears tried to pull the price back below the breakout level on Nov. 6 but the long tail on the candlestick shows that bulls are buying on dips. The rising moving averages and the RSI near the overbought zone indicate the path of least resistance is to the upside.
If bulls thrust the price above $55.09, the DOT/USDT pair could rally to $63.08. The bears may have other plans as they will attempt to sink the price below the breakout level at $49.78. Such a move will suggest a lack of buyers at higher levels.
A break and close below the 20-day EMA ($46.82) will be the first sign that the bulls may be losing their grip. The pair could then drop to the 50-day SMA ($38.54).
DOT/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that the pair is rising inside an ascending channel. Although bulls pushed the price above the channel, they have not been able to build upon the advantage. This indicates that the bears are defending this resistance with vigor.
The pair rebounded from the centerline of the channel and the bulls will again try to clear the overhead hurdle. If they succeed, the pair may pick up momentum.
Alternatively, if the price turns down from the current level or the overhead resistance and breaks below the centerline, the pair may drop to the support line. A bounce off this level will keep the uptrend intact but a break below it will signal a possible change in trend.
LUNA/USDT
Terra protocol’s LUNA token broke and closed above the overhead resistance at $49.54 on Nov. 4. The bears tried to pull the price back below the breakout level on Nov. 5 and 6 but could not sustain the lower levels. This suggests that the bulls are buying on dips.
LUNA/USDT daily chart. Source: TradingView
If bulls drive the price above $53.18, the LUNA/USDT pair could rally to the resistance line of the wedge where the bears are expected to mount a stiff resistance. The bullish momentum could pick up if bulls thrust the price above the wedge.
Alternatively, if the price turns down from the current level or the overhead resistance, the pair may drop to the support line of the wedge. A break and close below this support will signal a possible change in trend. The pair could then drop to $35.
LUNA/USDT 4-hour chart. Source: TradingView
The bulls pushed the price above the resistance line of the triangle indicating that they had overcome the resistance from the bears. The sellers tried to pull the price back into the triangle but the bulls defended the breakout level aggressively.
Both moving averages on the 4-hour chart are sloping up and the RSI is in the positive territory, indicating advantage to buyers. If bulls drive the price above $53.18, the pair may rally to the pattern target at $62.59.
AVAX/USDT
After trading near the overhead resistance at $79.80 for the past three days, Avalanche (AVAX) has broken above the barrier. This indicates the possible resumption of the uptrend.
AVAX/USDT daily chart. Source: TradingView
The rising moving averages and the RSI in the overbought territory indicate that bulls are in control. If the price sustains above $79.80, the AVAX/USDT pair could rally to $93.04 and then try to challenge the psychological level at $100.
Contrary to this assumption, if the price turns down from the current level and dips back below $79.80, it will suggest that markets have rejected the higher levels. The pair could then drop to the 20-day EMA ($69.51).
AVAX/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows the formation of a rounding bottom pattern which completed on a breakout and close above $79.80. If bulls sustain the price above $79.80, the pair could start its northward march toward the pattern target at $108.56.
The first important level to watch on the downside is $79.80. A bounce off this level will indicate that bulls are aggressively buying on dips and that will increase the likelihood of the resumption of the uptrend.
Conversely, a break below $79.80 could sink the pair to $72. A break below this support will suggest that bears are back in the game.
EGLD/USDT
Elrond (EGLD) broke above the previous all-time high at $303.03 on Nov. 3, which is a positive sign. The bears tried to pull the price back below the breakout level on Nov. 5 and 6 but failed.
EGLD/USDT daily chart. Source: TradingView
This suggests that bulls are attempting to defend the breakout level and flip it into support. A break and close above $329 will signal the resumption of the uptrend. The rising 20-day EMA ($281) and the RSI near the overbought zone indicate the path of least resistance is to the upside.
Contrary to this assumption, if the EGLD/USDT pair turns down from the current level and breaks below $303.03, the next stop could be the 20-day EMA. A strong rebound off this support will keep the uptrend intact but a break below it could open the doors for a deeper correction to the 50-day SMA ($249).
EGLD/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows the formation of an ascending triangle pattern, which completed on a break and close above $303.03. This positive setup has a pattern target at $427 but the rally may not be linear as the bears are likely to pose a stiff challenge at $355.
A break below the 20-EMA will be the first sign of weakness. That could pull the price down to the breakout level at $303, which is an important support for the bulls to defend. If this support cracks, the pair may drop to the 50-SMA and then to the trendline of the triangle.
Popular pseudonymous analyst and trader “Crypto Capo” (“@CryptoCapo_” on Twitter) says that in this bull cycle $ADA and $DOT, which are the native tokens of Cardano and Polkadot respectively, are headed to at least $10 and $250 respectively.
On Wednesday (November 3), Crypto Capo told his over Twitter 191,000 followers that he is still bullish on Cardano and still confident that $ADA is going to over $10 in this bull cycle, but he is even more bullish on $DOT.
As for those people who think that a $10 price prediction for $ADA is overly optimistic, Crypto Capo said on September 25 that even at $10, Cardano’s market cap would be smaller than that of Ethereum.
On April 26, the Cardano Foundation announced that it was “delighted to welcome COTI as a payment gateway provider for the Cardano ecosystem” and that COTI would “provide a simple and easy to integrate payment gateway, called ADA Pay, for organizations, merchants, and charities looking to directly accept and manage ada payments and donations.”
The Cardano Foundation’s press release went on to say that “the first ADA Pay integration for the Cardano ecosystem will facilitate ada payments from ada holders to international non-profit organization (NPO) Save the Children” (which will “utilize the ada they raise through the Cardano community using COTI’s payment gateway for their mission in Rwanda”).
As for Polkadot — which he believes will outperform Solana ($SOL), Binance Coin ($BNB), Cardano ($ADA), Ethereum ($ETH), and Bitcoin ($BTC) in this cycle — he said on October 28 that he is “very bullish” on $DOT and gave $250+ as his medium-term price target for $DOT.
According to data by TradingView, currently (as of 17:15 UTC on November 5), on
According to data by TradingView, currently (as of 17:15 UTC on November 5), on crypto exchange Kraken, $ADA is trading around $1.9842. As for $DOT, it trading around $51.2990.
Bitcoin and cryptocurrency prices have rocketed over the last month, with the combined crypto market surging towards $3 trillion as ethereum, Binance’s BNB, solana, cardano and XRP make double-digit percentage gains.
The bitcoin price has climbed from around $45,000 per bitcoin in early October to all-time highs of $67,000 late last month, in part due to the launch of the first U.S. bitcoin futures exchange-traded funds (ETFs). Bitcoin has recently dropped back—despite huge new price targets even as ethereum and its smaller rivals hit fresh highs.
Now, Michael Saylor, a bullish bitcoin buyer, has predicted “trillions of dollars” will flow into bitcoin once the U.S. regulator approves a fully-fledged bitcoin ETF—helping bitcoin to replace gold and become the primary asset index for the Western world.
Bitcoin’s price is back at record highs last seen in April – and that means its energy use is soaring, too.
It uses as much electricity each year as the Netherlands, an uncomfortable fact as world leaders meet at COP26.
Yet many big players are shifting to renewable energy, meaning bitcoin’s carbon emissions aren’t necessarily shooting up too.
Bitcoin has made a dramatic comeback over the last couple of months and is once again trading around record highs between $60,000 and $65,000.
The bitcoin bounce means people are rushing to “mine” more of the cryptocurrency. And that means bitcoin’s energy use is shooting up once again.
Bitcoin’s “hash rate” – the amount of computing power dedicated to mining the digital currency – has risen sharply, and analysts say it’s likely to hit a new high soon. Its electricity consumption has also jumped, and is nearing the all-time highs seen in May, according to Cambridge University data.
Bitcoin is currently using around as much electricity each year as the Netherlands, an uncomfortable fact just as world leaders meet in Glasgow, UK to try to tackle climate change at COP26.
Bitcoin ‘mining’
Bitcoin is so energy intensive because of the system it uses to verify transactions and keep the network secure. Ethereum – the second-biggest cryptocurrency – also uses the same system, meaning the two dominant tokens are giant energy guzzlers.
Under the system, users called miners hook up massive computers to compete against each other to solve complex “cryptographic” puzzles. Solving these puzzles gives the miners the right to verify transactions, and earns them some cryptocurrency in reward.
Naturally, the higher the bitcoin price goes, the more attractive mining is. Miners’ revenues soared in October to $1.72 billion, according to data from The Block, just shy of March’s record high of $1.75 billion.
As more people start mining, the hash rate rises. Alex de Vries, founder of bitcoin energy data service Digiconomist, told Insider that it “seems inevitable” that the hash rate and electricity consumption will soon hit a new high, given the current bitcoin price.
As well as using huge amounts of energy, the mining process also generates tonnes of electrical waste, because miners constantly jettison old machines in favor of more efficient new ones. A recent Digiconomist report said a single bitcoin transaction creates as much waste as throwing out two iPhones.
A heated debate
Yet just because bitcoin’s electricity consumption is surging, that doesn’t necessarily mean its carbon emissions are too.
Although lots of bitcoin fans argue that its electricity consumption isn’t a problem, many of the biggest players are trying to clean up its act and shift towards renewable energy.
After Elon Musk criticized bitcoin’s energy use, big crypto names such as Michael Saylor’s tech company MicroStrategy founded the Bitcoin Mining Council, which promotes greener mining.
Estimates are tricky, but in 2020 Cambridge University reckoned around 40% of bitcoin mining was powered greenly. The Bitcoin Mining Council estimated last month that it could be around 58%. That would make it one of the greenest industries in the world – although bitcoin critics say that energy could be more useful to society elsewhere.
China’s major crackdown on crypto mining is likely to have helped bitcoin become greener. Most mining used to take place in the country, where coal is the dominant energy source. But the US, where renewables are often the cheapest energy source, is the new global mining hub.
The major environmental push in finance is also likely to make a difference, with less energy-intensive tokens and networks more likely to attract the big bucks from institutions.
Ethereum has grand plans to differentiate itself from bitcoin by switching to a much more environmentally friendly security and validation system by the end of 2022. JPMorgan has spoken approvingly of the changes, in a sign of the way the winds are blowing.
