Bitcoin Mining Transforming Global Energy Crisis, Says Arcane Research

Arcane Research, a Norway-based digital asset analysis company providing data-driven analysis and bespoke research within the field of cryptocurrency, has published a report examining the relationship between Bitcoin mining and global energy.

The report states that the crypto mining industry has the capacity to transform worldwide energy production for the better, contrary to what is normally viewed as social and environmental harm associated with the sector.

The paper provides four ways in which mining can improve energy systems in a desirable and economical manner.

First, crypto mining is becoming a catalyst for the development of renewable energy projects. Bitcoin miners have recently started buying the cheapest sources of energy available, renewable (wind and solar) sources of energy.

In this way, cryptocurrency mining provides an economic incentive to build more renewable energy projects and help minimize fossil energy consumption.

On the second note, the constant energy produced by the flexible, reactive power of Bitcoin mining allows the industry to give back energy to the national electricity grid when demand is too high. In July, industrial miners in Texas collectively powered down to assist in protecting the grid during a heatwave as part of a state-wide demand response program.

Such reactivity will be especially important in the coming years as the world increasingly transitions from flexible fossil fuels to non-flexible renewables. Thanks to proof of work consensus powering crypto mining, renewable energy sources are becoming profitable through leveraging the portability, modularity, and agnosticism of Bitcoin miners.

Lastly, besides supporting renewable energy, crypto miners have also begun to help make oil drilling a cleaner and more efficient process.

Oil drilling normally produces natural gas that cannot always be economically harnessed for consumption. Such natural gas is beginning to become useful for crypto mining. This, therefore, helps oil companies such as Exxon, Chevron, Saudi Aramco, and Gazprom, among others, to make profits through Bitcoin mining and also reduce the greenhouse gas emissions associated with the byproduct.

Over recent years, Oil field Bitcoin mining has been growing fast, especially in the United States and Canada.

In March, Exxon, a major US multinational oil and gas corporation, announced plans to use Bitcoin mining for this purpose.

The crypto economy has demonstrated that it is here to stay, as a variety of interesting new areas for investments in the industry remain constantly evolving. Crypto mining is one such avenue for business profitability.

The rapid growth of the crypto economy is not only placing fresh demands on but also offering new hopes for electricity grids. Crypto mining offers energy firms new opportunities to create new revenue streams, improve demand response, and accelerate the expansion of the long-term renewable resource base.

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Institutional Crypto Exposure Hits 51%, Goldman Sachs Study Shows

Out of 172 institutional clients surveyed, leading global investment bank, Goldman Sachs found out that 51% of them had crypto exposure, according to a report published by Arcane Research.

The survey noted that institutional interest in cryptocurrencies was witnessing strong growth because crypto exposure rose from 40% in 2021 to 51% in 2022. 

Source: Arcane Research

Furthermore, this growth is expected to increase. Per the report:

“Of the 172 surveyed clients, 60% responded that they expect to increase their digital asset holdings in the next one to two years.”

Goldman Sachs eyes rolling out crypto investment services 

Goldman Sachs has been gearing up for the crypto space in recent weeks, given that its website is giving digital assets a keen eye. 

The newly appointed global head of digital assets at Goldman’s private wealth management division, March Rich, recently disclosed that the bank was considering availing a “full-spectrum” of crypto investments through derivatives, physical Bitcoin, or traditional investment vehicles. 

Therefore, Goldman Sachs is edging closer to rolling out its first investment vehicles for crypto assets for clients in its private wealth management group.

Rich noted:

“Some Goldman clients feel like we’re sitting at the dawn of a new Internet in some ways and are looking for ways to participate in this space.”

She added:

“We are working closely with teams across the firm to explore ways to offer thoughtful and appropriate access to the ecosystem for private equity clients, and that is something we look forward to delivering in the near term.”

The bank recently disclosed that it was looking at ways of meeting increasing client demand to own and invest in Bitcoin while still staying on the right side of the law, Blockchain.News reported.  

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Bitcoin Volatility Drops To 15 Month Low; What This Could Mean

Is this the calm before the storm? Bitcoin volatility is seldom this steady. After a tumultuous downturn that had the whole market upside down, bitcoin’s fiat price is relatively flat. Everyone can breathe and rest, for a while at least. What does this mean and how long will it last, though? That’s what we’re here to explore. 

Related Reading | Dwindling Bitcoin Volatility Could Lead To Decisive Move

It’s no secret that the market was expecting a hike in the interest rates, and thus people were selling risky assets. However, the powers that be postponed the increase, and, well, the market calmed down. During this downturn, though, Bitcoin proved once again that the market considers it the least risky asset in the cryptocurrency space. Everyone bled, but Bitcoin considerably less so.

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In any case, back to volatility, Arcane Research’s The Weekly Update has the scoop: 

“Bitcoin’s 7-day volatility is now at the lowest level since November 2020. Together with the trading volume, the volatility exploded last week when bitcoin dropped below $40,000. After bottoming at $33,500, the bitcoin price has been slowly grinding upwards, and it looks like the market has released sufficient pressure for now. Still, we might see new volatility peaks soon as bitcoin trades closer to several key resistance and support levels that might be catalysts for increased volatility.”

The pressure is off, but, the steadiness might not last. If there’s one thing we can count on in regards to bitcoin is this: volatility will return sooner than later, for better or worst. 

Bitcoin volatility - The Weekend Update

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BTC/ USD Volatility | Source: Arcane Research’s The Weekly Update

What Are The Resistance And Support Levels?

Bitcoin “has been slowly grinding upwards,” and it’s getting close to that magical number 40. Again, The Weekly Update:

“$40,000 is a key resistance level. With BTC’s slow grind upwards lately, we could see BTC testing this resistance level shortly. A breakthrough would be a relief for the bulls and could signal a trend reversal.”

On the other hand, if things go south and the market starts bleeding again, there’s another number that we have to be aware of:

“Towards the downside, $32,500 acted as support during the initial sell-off, but $29,000 remains as the most critical support level. A breakout below $29,000 would be unsettling, which could cause havoc in the market.”

If Bitcoin touches 40 or 29, the boat might start to rock. Fasten your seatbelts and be sure to wear a life jacket.

BTCUSD price chart for 02/0/2022 - TradingView

BTC price chart for 02/01/2022 on Bitstamp | Source: BTC/USD on

What Causes Bitcoin Volatility?

The short answer is supply and demand. However, since the Bitcoin economy is still small compared to the world’s, several factors can upset or propel the price. From any kind of news to influencers’ opinions to regulation talk or concrete action to whales dumping on the market to interest rates hike rumors. Anything. Also, take this Investopedia insight into account:

“Bitcoin has only been around for a short time—it is still in the price discovery phase. This means that prices will continue to change as investors, users, and governments work through the initial growing pains and concerns until prices stabilize—if a stable point can be reached.”

Related Reading | This Bitcoin Volatility Index Pattern Suggests A Short Squeeze May Be Near

Yes, Bitcoin is the largest cryptocurrency by far and Fidelity thinks it “should be considered first and separate from all other digital assets that have come after it.” However, the asset is still a wild teenager. Expect volatility and learn how to deal with it. It’s going to be a bumpy ride.

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Arcane Research releases its crypto predictions for 2022

Blockchain data research firm Arcane Research has taken a look at the year that was in its final report for 2021 and offered its predictions for crypto markets going into 2022.

Arcane’s Dec. 28 The Weekly Update report focuses on Bitcoin (BTC) and Ethereum (ETH) but delves into other major coins, decentralized finance (DeFi), meme coins, nonfungible tokens (NFT), derivatives, and others. Arcane offered a prediction for what would happen in 2022 on every topic covered in the report.

“Bitcoin will outperform the S&P 500 in 2022.”

The report noted that through 2021, Bitcoin has outperformed the S&P 500 index. Bitcoin is up 73% while the S&P 500 is up 28% this year, and Arcane believes Bitcoin will continue this performance next year. The benchmark S&P 500 index consists of the 500 biggest companies listed on American stock exchanges.

“XRP and Cardano will fall out of the top 10”

Arcane noted the tremendous gains on Binance Coin (BNB) this year, peaking at about 1600% in May and rounding out the year up 1344%. Based on this and the growth in market cap from alts like Solana and Terra, along with the NFT craze, the analysts are tipping Ripple (XRP) and Cardano (ADA) will exit the top-10 list.

Alternate layer-ones will continue to outperform ETH.

While ETH outperformed BTC this year with a gain of 455% to 73%, other layer-one blockchains outperformed ETH. Layer-one refers to standalone, base layer blockchains. Terra Luna ends 2021 up 14,823%, Fantom is up 13,549%.

Traditional gaming companies will increasingly add NFTs

This year in crypto can be defined in no small part by the massive sales of NFTs, and blockchain games like Splinterlands and Alien Worlds have around 526,000 daily active users according to DappRadar. Arcane predicts that in 2022, traditional gaming brands will branch into the NFT space and capitalize on the burgeoning market.

Even more crypto companies will go public and several will have valuations above $5B.

This year saw Coinbase go public on April 14th and it currently has a market cap of $72 billion. The five biggest crypto company public listings slated for 2022 are all currently valued over $1 billion. Arcane believes there will be a numbe others valued higher than $5 billion like crypto exchange Bullish, which is currently valued at $9 billion.

Bitcoin ETFs will hold more than 1M BTC by end of 2022

Several Bitcoin futures exchange-traded funds (ETF) were launched in 2021. They currently collectively hold about 846,309 BTC and Arcane says the growth will only continue in 2022.

Related: Ethereum whales dumping ETH as price slides below $4K, data shows

“Hashrate will become even more geographically distributed”

When China banned Bitcoin mining, global Bitcoin hashrate sharply fell, then nearly as suddenly recovered. Now the United States leads the world in hashrate, followed by Kazakhstan and Russia. Arcane believes miners will disperse even further into regions like Latin America.