Some regulatory bodies around the world are becoming increasingly oppressive and hostile to Bitcoin and digital assets. This has been exacerbated by the Russian invasion of Ukraine as policymakers mistakenly believe that the former will suddenly switch to using cryptocurrencies.
Other watchdogs are concerned about the excessive energy requirements of proof-of-work Bitcoin mining (although it still uses less than all refrigerators and TVs in the United States alone).
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Bitcoin ban a big mistake
The European Union is preparing to vote today on a Markets in Crypto Assets (MiCA) framework that could lead to severe restrictions on PoW mining.
Under the draft law, crypto-assets traded in Europe will be “subject to minimum environmental sustainability standards and establish and maintain a phased rollout plan to ensure compliance.” On March 13, Bloomberg reported that a new law could be a de facto ban on Bitcoin and Ethereum (still PoW) in the EU.
On Sunday, Saylor tweeted that proof-of-stake assets are considered securities. Therefore proof-of-work is still very relevant and needed:
“The only established method of creating digital property is through Proof-of-Work. Non-energy-based crypto approaches such as Proof-of-Stake should be considered securities until proven otherwise. Banning digital property would be a trillion dollar mistake.”
Welcoming productive regulation, Saylor added that Bitcoin is digitally owned and the “most cost-efficient method we’ve discovered yet to turn energy into wealth.” MicroStrategy is the largest corporate holder of BTC with 125,051 coins worth approximately $4.8 billion at current prices.
Europe comprises about 12-14% of the total BTC mining hash power according to August 2021 figures from Cambridge University. Ireland and Germany have the lion’s share of that total, so global hash rates are unlikely to be affected.
What could happen is a broader ban or heavy-handed regulation, which could hurt markets and industry. Mining activities have already seen a major migration from China to North America in recent years and more may follow.
BTC Price Volatility
As if in anticipation of more bad news today, BTC had lost 2% in a decline below $38,000 hours ago.
However, the situation changed when Elon Musk reaffirmed his support for bitcoin and previously said he will not sell his cryptocurrency holdings. BTC rose about $1,000 and is currently around $39,000. The billionaire also outlined the assets that should perform well as inflation skyrockets.
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