Biden Administration Takes Interest in Bitcoin Mining Before Important Elections
Bitcoin Mining has again come under scrutiny as US regulators are now analyzing its consumption of electricity. The administration of US President Joe Biden has sent out an “emergency collection of data request” related to the power consumption of Bitcoin miners. The move has sparked uproar as crypto enthusiasts are viewing the decision to be a Bitcoin against the US currency conflict.
US EIA to gather data on electricity consumption by Bitcoin Miners
The Energy Information Administration (EIA) is scheduled to start the immediate data gathering this coming week. This comes after the Biden administration approved an emergency investigation into the amount of electricity Bitcoin and cryptocurrency miners are using.
As part of an emergency data collection request approved by the Office of Management and Budget on January 26, people who indulge in Bitcoin mining will have to reply with information about how much energy they use. This will include people who use 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 more and more fervent in their belief that the U.S. currency is about to collapse. The concerns stem due to the massive increase in the number of dollars and debt brought about by the COVID-19 pandemic. As of today, the total debt in the US stands at an all-time high of $34.1 trillion. Markets are concerned that the current scrutiny over Bitcoin Mining might just be another way for the US government to impose bitter 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 might be in danger. Historical data suggests that Bitcoin prices have never performed well in volatile markets and uncertain macroeconomic conditions. If the debt default were to occur in 2025, a decline in bitcoin values might be caused by panic selling and large trader liquidations.
A similar situation had previously occurred in early 2020. The pandemic-related slowdown in economic activity and a collapse in the stock market subsequently lowered the value of cryptocurrencies. At the very least, the consensus in the market is that a recession may cause a significant cryptocurrency sell-off and price decline.
On the other hand, the uncertainty around debt and the value of the US dollar could also create a potential upside. Market players may choose to keep their money away from centralized authorities due to the possibility of central banks engaging in debasement. In this instance, the digital asset market may rise as a result of a decentralized crypto attractiveness.
Strike founder and CEO Jack Mallers in an interview explained a possible alternative in this dire situation. He says amid the debt equation, government local currencies may depreciate. This could be more prevalent if the present debt trend continues at its current rate. Maller claims that this might force investors into a fiat debasement and cause a collapse in buying power. He feels that in such a scenario, people require a physical asset that is decentralized and that at the moment, Bitcoin is the only option.
Where will crypto voters lean in this election?
Biden administration has time and firmed their belief that they might not be as huge of a crypto supporter. The data collection has also indicated that the current US government might try to promote the dollar over any other digital currency. Though Bitcoin mining’s power consumption tends to be a debatable topic, the data collection comes right ahead of the election. This fan is concerned that maybe a Biden 2.0 government will not favor the digital currency realm.
Voters that use 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 harsh enforcement and a certain aversion towards 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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