Iran to Introduce Additional Penalties for Illegal Crypto Mining

Iranian authorities are tightening their grip on illegal crypto mining in the country in response to the failing power challenges that the nation is facing.

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As reported by the Tehran Times, subsidised energy for crypto mining is now prohibited, and the Iranian government will pass new regulations to increase the penalties for illegal cryptocurrency mining using subsidised electricity.

The Distribution and Transmission Company of Iran, also called Tanavir, revealed through its representative Mohammad Khodadadi Bohlouli that the new rules will see offenders pay more fines moving forward. Khodadadi also noted that frequent offenders would likely be jailed for 3 to 5 years, a move that is set to serve as a deterrent to others.

“Any use of subsidised electricity, intended for households, industrial, agricultural and commercial subscribers, for mining cryptocurrency is prohibited,” Khodadadi said.

Iran is a known hub for crypto mining in the Middle Eastern region as the country enjoys a cheaper cost of electricity which attract a lot of miners. The sovereign nation designated crypto mining as an industrial activity, and despite the cheap electricity source, miners were placed on a different payment tariff from what commercial subscribers pay.

The new regulations are being sponsored as the interruption to the national grid is increasing per crypto miners connecting to commercial energy sources. In times past, Iran has been overburdened by miners as those making their exodus from China after the government banned Proof-of-Work (PoW) mining activities.

A few years back, the Iranian government showed how bullish it is on Bitcoin mining by approving as many as 1,000 licenses to companies that want to mine cryptocurrencies

While the country is posing to be welcoming to miners, its current power challenges make it make a definitive u-turn on some of its policies. While Iran is not banning mining outrightly, it is boosting its incentive to anyone who exposes the activities of illegal crypto miners in the nation.

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Mawson Infrastructure Group Signs New Hosting Services Deal with Foundry Digital

Mawson Infrastructure Group, an Australian Bitcoin miner, announced on Friday that it signed a 12 megawatt (MW) hosting co-location deal with the U.S. crypto mining services provider Foundry Digital.

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The deal will bring Mawson’s crypto mining hosting co-location business to a total of 114 MW, an increase of 5,600% from 2 MW on December 31, 2021. Mawson expects the first mining hardware under the deal to be deployed by the end of Q1, 2022. The miner plans to deploy the mining hardware within its own proprietary Modular Data Centre (MDC) technology at its facilities in the US.

The new signing comes only two days after Mawson signed a 100 MW crypto-mining hosting agreement with Celsius Mining, a subsidiary of crypto lending firm Celsius Networks. Last Tuesday, Mawson signed its largest co-location customer for 100 MW with Celsius Mining.

James Manning, CEO and founder of Mawson, talked about the latest development and said: “in FY2021, we generated (unaudited) $850,000 in revenue from our 2 MW of hosting customers – the agreements we have signed this week take us to 114 MW in our hosting business in total. Our hosting business is expanding rapidly and total contracts signed to date makes us one of the largest Nasdaq listed Bitcoin mining ASIC hosting companies.”

Providing Customers with Access to New Digital Asset Products

Founded in 2019, Mawson Infrastructure Group continues to deliver new and innovative digital asset products to the global market.

Mawson is an Australia-based digital infrastructure provider specializing in cryptocurrency mining and digital asset management, with multiple operations throughout the USA and Australia.

The firm is emerging as a global leader in ESG-focused Bitcoin mining and digital infrastructure. In October last year, Mawson partnered with investment manager Quinbrook Infrastructure Partners in order to open a renewables-powered site in New South Wales, an Australian State. Mawson has identified renewable energy projects it plans to develop as part of its efforts to decarbonize the global society, with a key focus on sustainable Bitcoin mining.

Furthermore, last November, Mawson partnered with Cosmos Asset Management Pty Ltd to provide Australians with new investment opportunities in the growing digital asset ETF (exchange-traded fund) products.

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Spanish Lawmaker Tables a Proposal to be Bitcoin Mining Hub after Kazakhstan Internet Shutdown

Maria Munoz, a member of the Congress of Deputies, seeks to make Spain a Bitcoin mining hub while the turmoil is still rocking Kazakhstan.

Munoz pointed out:

“The protests in Kazakhstan have repercussions all over the world including Bitcoin. We propose that Spain position itself as a safe destination for investments in cryptocurrencies to develop a flexible, efficient and safe sector.”

Munoz added that the BTC hashrate was nosedived in just two days based on the internet shutdown experienced in Kazakhstan. Therefore, Spain should position itself to gain a competitive edge regarding Bitcoin mining.

As the second-largest BTC mining hub, Kazakhstan experienced a wave of protests due to high energy costs. As a result, the government imposed a countrywide internet shutdown to tame the unrest, prompting BTC miners to shut down their operations. This caused the hashrate to slip by 19.6% from the peak of 229 EH/s recorded on January 1 to lows of 184.25 EH/s. 

The slip in hashrate has also made mining difficulty on the Bitcoin network to hit a 7-month high, acknowledged by market insight provider Glassnode.

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The hashrate is used to measure the processing power of the BTC network. It allows computers to process and solve problems that enable transactions to be approved and confirmed across the network.

Meanwhile, JPMorgan Chase sees more crypto adoption happening this year. The leading investment bank noted that Bitcoin was well-designed as a modern store of value, and its robust design was prompting more confidence and value. 

Top American multinational investment bank Goldman Sachs echoed similar sentiments and stated that Bitcoin would “most likely” become a bigger proportion over time. Precisely, if Bitcoin were to grab a 50% market share, its price would reach just over $100,000.

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Bitcoin Slips to 4-Month Low as Kazakhstan Internet Shutdown Hampers Mining

Bitcoin (BTC) dropped below $42K for the first time since September 2021 as the market remains in the red. 

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The leading cryptocurrency was down by 2.92% in the last 24 hours to hit $41,733 during intraday trading, according to CoinMarketCap

This represents a 39.5% decline from the all-time high (ATH) price of $69,000 hit in November last year. 

A wave of protests erupted in Kazakhstan due to high energy costs. As a result, the nation’s administration imposed a countrywide internet shutdown to tame the unrest, prompting BTC miners to shut down their operations.

Therefore, the Bitcoin mining hashrate has slipped by 19.6% from the peak of 229 EH/s recorded on January 1 to the current 184.25 EH/s, according to data analytic platform Coinwarz. 

Kazakhstan has become the second-largest BTC mining hub after the United States, following the mass exodus of miners from China in May 2021.

The slump in Bitcoin price is also attributed to the U.S. Federal Reserve plans to raise interest rate in March.

Therefore, there is a great probability that the Fed will raise interest rates this year amid greater discomfort with high inflation. As a safe-haven asset with high inflation, Bitcoin fell below $44,000 immediately after the announcement, and the price continues to nosedive.

The significant liquidation in the crypto market has sent the market cap below $2 trillion as it sits at $1.96 trillion, according to CoinMarketCap. 

Meanwhile, market analyst Michael van de Poppe believes that Bitcoin needs to reclaim the $46,000 level to realize an upward momentum. He stated:

“Might be a scenario for a reversal on Bitcoin. In that case, bullish divergence seems to be created (another scenario is a fast recovery above $46K, that’d be a signal too).”

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With El Salvador President Nayib Bukele disclosing his bullish forecasts that Bitcoin price could reach $100,000 this year, it remains to be seen how the top cryptocurrency will play out.

However, Goldman Sachs analyst Zach Pandl said in a recent research note that bitcoin is likely to overtake gold in market shares in 2022.

 

Goldman Sachs said that Bitcoin currently has a 20% share of the “store of value” market. The cryptocurrency’s market capitalization is at $700 billion, while $2.6 trillion worth of gold is owned as an investment.

Goldman Sachs has further predicted that Bitcoin will “most likely” become a bigger proportion over time. The American multinational investment bank and financial services company also noted that if Bitcoin were to grab a 50% market share, its price would reach just over $100,000, Blockchain.News reported.

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Iran Bans Crypto Mining to Avert Major Blackouts in Winter Season

Iran has announced a fresh ban on licensed cryptocurrency mining in the nation until March 6 as part of a commitment to save power and avoid potential blackouts in the forthcoming winter season.

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Mostafa Rajabi Mashhadi, director of the state-run Iran Grid Management company and a spokesman for Iran’s power industry recently announced that the country has temporarily shut down all authorized cryptocurrency mining centres in order to ease the strain on the country’s power plants. The ban is the second time this year in an effort to avoid blackouts within the country.

In an interview with state TV, Rajabi stated that the ban will be effective until March 6 and will free up 209 megawatts of power consumption in the household sector. He added that authorities have been cracking down on illegal mining done both by individuals at home and large-scale industrial units. 

Rajabi stated that unlicensed operators in Iran account for the biggest share of crypto mining whereby they consume more than 600 megawatts of electricity. 

According to the executive, there will also be other fuel-saving measures such as turning off street lights within some areas while also regulating electricity consumption in offices. He further stated that the government aims for more than 60% of electricity production in the summer. 

Last week, the National Iranian Gas Company stated that the country witnessed a daily gas demand in household sectors that rose to unprecedented 570 million cubic meters per day while the country reached an upper limit of its natural gas production at 800 million cubic meters a day.

Global Disaster with Bitcoin Mining

Earlier in the year, there were a series of blackouts within major cities of Iran. Such unfortunate incidents prompted the government to ban crypto mining. In October, the state electricity company warned that illegal crypto mining in Iran risks new power cuts in the coming winter season. On several occasions, Iranian officials have accused unlicensed crypto miners of using huge amounts of electricity.

Iran was among the first nations in the world to legalize the mining of cryptocurrencies. In September 2018, the government required all miners to have a license. In May, authorities stated that illegal miners who normally have access to subsided electricity consume between six and seven times more electricity than those with licenses. In the same month, the government issued a temporary ban for all crypto mining, a day after the energy minister apologized for unplanned power blackouts in major cities. The ban was lifted in mid-September.

The majority of crypto mining had been for a long time centred in China, but that changed this year when the country’s ban led major operators to move to other nations. These operators had to choose nations that offer cheap power. As such, countries from Iceland to Kazakhstan placed limits on the power industry due to pressure associated with power grids.

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Crypto Market Capitalization Inches Closer to $3 Trillion

The cryptocurrency market has experienced twists and turns in 2021, but this has not dampened its spirits to soar to new heights. This market’s capitalization is a stone’s throw away from the $3 trillion mark as it stands at $2.96 trillion.

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This upward momentum has been boosted as leading cryptocurrencies continue setting new all-time highs. For instance, Bitcoin broke the record at $68,500 in the last 24 hours as more investments continue trickling into this market. 

Furthermore, Ethereum topped $4,800, a scenario not seen in its 6-year journey.

The crypto market has been experiencing an uptick in activities based on the ripple effect of some of the ecosystems.

For instance, Solana (SOL) is experiencing significant growth based on the high transaction speeds it offers because it merges the proof-of-history and proof-of-stake consensus mechanisms.

As a result, its demand in booming decentralized finance (DeFi) and non-fungible token (NFT) sectors continues to grow. 

Miners emerge as some of the biggest beneficiaries in the crypto space

As the value of the crypto market continues to increase, miners are benefiting from the surge based on the revenue generated. For instance, Bitcoin miners’ revenue has surged by 550% since the 2020 halving.

On-chain metrics provider Glassnode explained:

“Bitcoin miners see BTC income halved every four years. In the current epoch, miners average between 900 and 1,000 BTC per day. Despite this reduction in BTC denominated income, miner revenue in USD is up 550% since the 2020 halving, and approaching an ATH of $62M+ per day.”

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Despite Bitcoin miners making a kill with $13.6 billion, Ethereum miners have earned the most in 2021 with a revenue of $17 billion, according to crypto insight provider Arcane Research. 

This is based on the massive activity witnessed on the Ethereum network, which has increased transaction fees

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Ethereum Miner Balances Hit a 50-Month High as ETH Leads in NFT Sales

Ethereum (ETH) miners have seen their holdings go through the roof to the tune of $1.85 billion.

Crypto analytic firm Santiment explained:

“Ethereum miner balances have continued to skyrocket. 532.75K ETH is the largest balance held by miners since July 13, 2016. The value of these coins is $1.85B, easily an AllTimeHigh.”

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A price surge coupled with increased usage has been instrumental in pushing ETH miner balances to a record high. For instance, Damian Sowers, the founder of Level Frames, recently stated that Ethereum usage was fifty-four times that of Bitcoin as the neck-to-neck battle between the two leading cryptocurrencies continues. 

Ethereum enjoys significant NFT dominance

According to Mason Nystrom, a researcher at Messari Crypto:

“The NFT market officially surpassed $10 billion in secondary sales combined across a variety of categories including gaming, PFPs (profile pics), sports, and collectables. Ethereum leads all blockchains and Layer-2s with over $6 billion in secondary NFT sales.”

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Therefore, Ethereum has surfaced as the backbone of the NFT sector, which is taking the crypto space by storm.

The non-fungible token (NFT) industry has experienced an uptick in activities, given that the tokens offered are different from the typical ones because of fungibility. 

NFTs are blockchain-based ownership digital assets, and their value is pegged on their uniqueness, given that the tokens are non-divisible and have to be bought in their entirety. 

As a result, these traits create intrinsic value for NFTs because of their limited supply.

Different industries continue to embrace NFTs, given that they are seen as significant stepping stones towards a virtual-reality world. For instance, leading Italian luxury fashion house Dolce & Gabbana recently sold a nine-piece collection of fashion NFTs dubbed Collezione Genesi for a whopping $6 million.

Ethereum realized capitalization scales the heights

According to market insight provider Glassnode:

“Ethereum realized capitalization just reached an ATH of $171,803,527,031.77.”

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Realized market capitalization is a metric calculated by valuing each supply unit at the exact price it last moved on-chain or at the last time it was transacted. 

As a result, it does not calculate coins that remain unmoved because cryptocurrencies can be lost, unreachable, or unclaimed. This contrasts with the standard market capitalization that values every supply unit evenly at the current market price. 

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Publicly-Traded Bitcoin Miners’ Accumulation Goes a Notch Higher

As Bitcoin (BTC) surpassed the $55K level for the first time since May, publicly-traded, miners have been cashing in because they have been in an accumulation stage.

Microstrategy CEO Michael Saylor said:

“In September, Riot Blockchain mined 406 BTC, sold none of its production, and ended the month with 3,534 BTC on its balance sheet. Publicly traded Bitcoin miners aren’t selling BTC; they are accumulating. The game has changed.”

Riot Blockchain is a Nasdaq-listed Bitcoin mining and hosting company.

Generally, BTC miners have been accumulating more holdings, as endorsed by market analyst Will Clemente.

“After a few weeks of selling, Bitcoin miners have started accumulating again.”

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Meanwhile, Institutional investors continue to show their confidence in Bitcoin based on their holdings. Reportedly, Bitcoin in public company treasuries recently surpassed 200,000 BTC.

Long-term holders own the largest Bitcoin sovereign supply

According to an on-chain analyst under the pseudonym TXMC:

“Bitcoin long-term holders now own the highest % of sovereign supply in history: 80.9%. Sovereign supply is the total supply not on exchanges.”

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BTC supply on exchanges has been nosediving because it recently hit a 28-month low. Therefore, a holding culture was presented, given that Bitcoin is transferred to digital wallets and cold storage for future purposes.

Meanwhile, short-term holders are buying BTC at breakeven, and this is prompting a price rally. TXMC explained:

“When Short-Term Holders dig themselves out of loss and begin buying coins at breakeven, shown here as a bounce off the black line, it often preludes a price rally. Paper hands are flushed out, and new buyers grab what they perceive as a value price.”

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Long-term holder supply shock reached a record-high earlier this month, suggesting Bitcoin price could surge in coming months. 

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Bitcoin Perpetual Swaps Open Interest Hits the Highest Point Since Mid-April by Topping the $16B Mark

Bitcoin (BTC) has been experiencing an uptick in activities with perpetual swaps of open interest recording a 5-month high.

Data analytic firm IntoTheBlock explained:

“Bitcoin Perpetual Swaps Open Interest just broke the $16 billion mark, the highest since mid-April. An increase in open interest alongside price is considered a bullish signal.”

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The leading cryptocurrency recently saw more than 1 million addresses transact, which hadn’t been seen in 2 months.

BTC exchange withdrawals surge to a monthly high

According to crypto analytic firm Glassnode, the number of Bitcoin exchange withdrawals reached a one-month high of 1,816.030.

This trend is usually considered bullish because coins are usually transferred to cold storage and digital wallets, which signifies a holding culture.

Glassnode added:

“The dominant majority (98%) of Bitcoin volume spent on-chain are coins that were moved within the last month. Historically, such low old coin volume has correlated with generational tops, bottoms and early bull markets (disbelief rallies).”

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Miner revenue hit a 3-month high

Bitcoin miners’ revenue rose to a 3-month high of $5.9 million amid hashrate reaching a monthly high. 

This is a sigh of relief to BTC miners because they found themselves on the receiving end after Chinese authorities intensified the crypto mining crackdown in May. 

For instance, Bitcoin mining sites in Sichuan were disconnected in June, which hampered more than 90% of China’s crypto mining capacity. As a result, the hashrate was nosedived by 50% in July. The upward trajectory in Bitcoin’s hashrate and miner revenue was prompted by a shift from the East to the West, with the United States being the largest beneficiary. 

The hashrate is used to measure the processing power of the BTC network. It allows computers to process and solve problems that enable transactions to be approved and confirmed across the network.

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ETH Miner Balances Recovering with its Transactions Hitting $2.5 Trillion in Q2 of 2021

Ethereum (ETH) was up by 1.52% in the last 24 hours to hit $1,972 during intraday trading, according to CoinMarketCap.

This renewed momentum is propelling ETH miner balances on the road to recovery, as acknowledged by Santiment. The on-chain metrics provider explained:

“Miner balances for Ethereum have been rising steadily for the past month or so. After miners held a staggering 163.3K ETH back on March 26th, it dipped to as low as 94.2K on June 6th. Now, balances are on the road to recovery back to 112K.”

 

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Ethereum mining has been on the receiving end based on the recent crypto market crash, partly triggered by an intensified crackdown on crypto mining by Chinese authorities. 

 

For instance, market analyst Lark Davis recently noted that Ethereum staked in the ETH 2.0 deposit contract continuously outweighed the one being mined daily, which was a bullish sign. 

 

Ethereum 2.0 (ETH 2.0), also known as the Beacon Chain, was launched in December 2020 and was regarded as a game-changer that seeks to transit the current proof-of-work (POW) consensus mechanism to a proof-of-stake (POS) framework.

 

Ethereum transactions surged to $2.5 trillion in 2021’s second quarter

According to Ryan Watkins, a researcher at MessariCrypto:

“In Q2 2021, Ethereum settled $2.5 trillion in transactions. This represents +65% QoQ and +1,490% YoY, and puts Ethereum on pace to settle $8 trillion in 2021.”

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Ethereum’s on-chain transactions continue skyrocketing because it is settling three times more value than Bitcoin daily. 

 

Davis acknowledged:

“Ethereum processed 4 trillion on-chain for around 0.25% in fees Paypal did 285 billion, fees of 3.4% (paid by merchants) With Optimism, Arbitrum, Polygon, and ETH 2.0 fees will drop even further for Ethereum.”

Ethereum’s increased on-chain transactions have been boosted by low average fees, which recently dropped to $2.19, and this was the lowest level it had gotten since December 2020. 

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Bitcoin (BTC) $ 43,992.79 0.04%
Ethereum (ETH) $ 2,357.01 0.13%
Litecoin (LTC) $ 77.45 1.39%
Bitcoin Cash (BCH) $ 255.80 2.69%