Belarus Government Could Consider Exploring Crypto Mining Says Energy Minister

The Belarus government is exploring the prospects of tapping into the crypto mining industry to utilize its excess energy supply. 

Crypto Mining on The Agenda

Belarus Energy minister Vikto Karankevich confirmed this development during a meeting with other energy stakeholders in the country. When quizzed on the prospects of using the country’s energy reserves to mine cryptocurrencies. Karankevich was positive with his reply and stated that the government was looking towards creating mining farms. 

He further commented that other countries globally had developed mining industries successfully. “China mines the most bitcoin. Most of the world’s largest mining pools are located in this country. It accounts for 65% of the total network capacity. Mining farms are also developing in the USA, Canada, Russia, and other countries”.

Karankevich concluded that the government was looking towards creating a detailed study on mining and the potential risks involved. It is interesting, but to start it, we need a detailed, comprehensive study of this issue, including assessing possible risks associated with this type of activity. He added. 

Belarus is known to have a healthy approach towards cryptocurrency and blockchain technology with its robust regulatory framework. In 2017, Alexander Lukashenko, the President of Belarus, signed a decree legalizing bitcoin and other cryptocurrencies.

Since then, the government has continued to make friendly policies and promoted crypto-adoption in the country. Its largest bank, Belarusbank, opened a crypto exchange service in November 2020. 

This latest development could suggest that the country is looking to explore crypto mining commercially. Belarus has huge nuclear reserves and produces more energy than it can consume, which can be channeled to mining farms.

More Nations Looking Towards Crypto Mining

The crypto mining industry is one sector that has generated a lot of attention from governments across the world. This is because of the potential profits that can be generated from mining valuable coins like Bitcoin and Ethereum. 

Recently the Ukrainian government was reported to be planning to build Bitcoin mining farms next to nuclear power plants. Also, in January, it was revealed that a regional government in Pakistan had begun to mine bitcoin. These developments show the growing adoption of crypto-mining in countries with excess energy generation.

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Increasing stock market volatility drags Bitcoin and altcoin prices lower

The cryptocurrency market faced another day of downward pressure as the unease in the traditional markets continues to spread following the recent interest rate spike on the 10-year U.S. Treasury bond. 

Data from Cointelegraph Markets and TradingView shows that the price of Bitcoin (BTC) fell to a low at $44,710 late on Feb. 25 before buying at the key support returned to help the digital asset recover back above $46,500 but generally, analysts are looking for $50,000 to become an established support before expecting bullish continuation.

BTC/USDT 4-hour chart. Source: TradingView

Despite major BTC purchases by MicroStrategy, Tesla and MassMutual, a majority of institutional investors still have security and tax treatment concerns that prevent them from investing in Bitcoin, according to Galaxy Digital co-president Damien Vanderwilt.

Institutional investment has been a significant source of optimism in the cryptocurrency sector in 2021, but its influence in helping BTC reach a market cap of $1 trillion may be overstated as recent analysis shows that stablecoin whales and retail traders still hold the most buying power.

Interest rate increase puts pressure on GBTC

On Feb. 25, the interest rate for the 10-year U.S. Treasury spiked to 1.52%, its highest level in over a year.

According to Chad Steinglass, Head of Trading at CrossTower, the move led to market-wide pressure that pushed the “GBTC premium down as low as negative 6% and it closed around negative 2% today.” The analyst sees interest rate volatility as a major source of market volatility, as the long end of the curve steepens while the U.S. dollar is pushed lower.

Daily cryptocurrency market performance. Source: Coin360

Cryptocurrencies fell under increased pressures as equity markets deteriorated throughout the day, possibly due to a “scramble for liquidity” resulting from traders “pushing up against margin calls and needing to free up cash.”

Steinglass said:

“I interpret the GBTC premium collapse as a sign that either retail is dumping to free liquidity, or large fund holders like ARKW are seeing outflows, which causes them to sell GBTC along with everything else.”

Traditional markets are still choppy

The 10-year Treasury yield pulled back .0582 basis points to 1.46 on Feb. 26, marking a 3.82% decrease from its high on the previous day. This leadi to a choppy day in the markets which saw the major indices close mixed.

The NASDAQ finished the day up 0.56%, recovering some of its losses from the 3.5% drop on Feb. 25. Meanwhile, the S&P 500 and DOW finished the day in the red, down 0.48% and 1.51% respectively.

A majority of the top cryptocurrencies also took on sharp losses on Friday, with the exception of Cardano (ADA), which became the third-ranked cryptocurrency by market cap after its price broke out to a new all-time high at $1.29. The current excitement for the altcoin appears to be connected to the upcoming ‘Mary’ mainnet launch scheduled for March 1.

ADA/USDT 4-hour chart. Source: TradingView

Basic Attention Token (BAT) has also battled back against the market sell-off to post a 6.43% gain following the Feb. 23 announcement of the upcoming Brave Decentralized Exchange (DEX).

Ether (ETH) price is down 7.19%  and trading below $1,500, while Binance Coin (BNB) has dropped 8.36% to $224.14

The overall cryptocurrency market cap now stands at $1.533 trillion and Bitcoin’s dominance rate is 61.3%.