news hardware Bitcoin: The real crypto winter is coming and prices will continue to fall. We explain why
While bitcoin has been facing a drop in value since the beginning of the year, the cryptocurrency may not be at the end of its surprises… Just like China or the United States, the European Union could take very restrictive measures regarding crypto mining.
Bitcoin miners in European member states will have to shut down their machines this winter
For some time, Bitcoin has faced many critics who point out the energy consuming and polluting aspect of its network.
In fact, the Bitcoin blockchain consumes a large amount of electricity through its Proof-of-Work (PoW) validation system. This operation uses the processing power of graphics cards and other ASICs to secure the network. Despite using more and more renewable energy, the more difficult Bitcoin becomes to mine, it consumes more and more electricity – as a result, it requires more and more powerful hardware to be mined.
Therefore, in the context of the post-conflict energy crisis in Ukraine, crypto miners are among the first targets of European leaders to face the winter.
On October 18th, the European Commission published a document on the energy ambitions of the various member states. In the form of questions and answers, the action plan clearly mentions the limitation of proof-of-work cryptocurrencies, of which Bitcoin is one.
“In light of the current energy crisis and heightened risks for the coming winter, the Commission urges Member States to implement targeted and ambitious measures to reduce electricity consumption by crypto players. (…) If it is necessary to carry out load shedding in the electricity systems, Member States must also be prepared to (sic) stop mining crypto assets. (…)”
These future restrictions could have serious consequences for the cryptocurrency…
“Winter is coming”, hard times for Bitcoin
If we’re talking about the winter of cryptos since Bitcoin’s price plunge, it might be that the term takes on its full meaning.
If bitcoin mining is banned in Europe this winter, it could have significant consequences for the crypto’s price. Bitcoin is currently struggling to rally around $19,000 and this type of news is not reassuring for investors.
So, if action is taken, Bitcoin could start a final phase of decline and bring it back to a price it reached a few years ago.
For now, however, this document remains a finding and no restrictions have been imposed on bitcoin miners. It is important to remember that the energy circumstances do not only affect European miners. Indeed, given the greening of multiple sectors, some states are wondering about the impact of bitcoin. The White House recently published a report in which a group of experts is investigating the ban on Bitcoin mining in the United States.
Despite these threats to the bitcoin network, many users believe that the bitcoin ban is a mirage – as China has banned mining since 2021, but the country remains the world’s second-biggest miner at the moment.
