Author Archives: Andrew Johnston

Bitcoin Mining Difficulty Will Cripple the Cryptocurrency Market in 2022

There is a cost to the promise of unlimited access, freedom from government authorities and little or no regulation and the ability conduct transactions anywhere and anytime. One of the most controversial topics around digital assets is crypto mining. Despite Bitcoin being the most popular cryptocurrency on the market, its mining process is one of the most controversial. Nearly every BTC investor knows about the negative sides to investing in Bitcoin. One of these is its mining process.

The public ledger of Bitcoin is not centrally controlled. Instead, miners constantly improve Bitcoin’s network. Bitcoin’s price has seen many highs and lows over the last few years. This has drawn a lot attention from the media worldwide about the negative effects of Bitcoin mining. Experts predict that Bitcoin mining could also negatively impact the cryptocurrency market by 2022, as more investors choose sustainable investment options.

While mining several cryptocurrencies has progressed from the initial stage of dangerous cryptocurrency mining, many major cryptocurrencies still use harmful algorithms that consume large amounts of energy and leave large carbon footprints. The government has urged the crypto industry to find alternative ways to create more cryptocurrency, including improvements in mining methods. Additional requirements include the registration of mining datacentres.

Experts believe that Bitcoin’s decline and other crypto markets are partly due to the negative effects of crypto mining and Bitcoin. This trend is expected to continue into 2022, as more Bitcoin miners from North America, Russia and Europe deploy more machines to mine Bitcoin. This suggests that investors will start to look for more sustainable investment options, which could adversely impact crypto investments in 2022.

Interest in Real Estate Investments in Spain Grew 400%, With Some Using Crypto and Stocks as Payment Method

Due to rising inflation costs and war, the real estate market in Spain and Europe has grown since last year. This has changed some of the economic recovery predictions. According to numbers by Europa Press, interest in the real-estate market has increased 400% since November. Many investors are now looking to buy properties without ever seeing them.

Investors have taken money from riskier investments such as stocks and cryptocurrencies to seek refuge in the property market. Rebeca Perez is the founder and CEO at Inviertis. This company allows users to rent properties in Spain. She said:

[Investors] are putting their money on the stock exchange and investing in real property to protect their assets. This situation has only worsened after the Russian invasion of Ukraine.

Revaluation of Crypto Investments

Perez believes that stock and crypto investors should value real estate properties because they offer stability and less volatility than stock and crypto markets. They also have the ability to get in and out of the market quickly due to high demand.

Some crypto investors have also been able to buy properties with cryptocurrencies and not need to exchange them for fiat currency using banks. Perez said that this can be very attractive for some investors. She explained:

It is possible to turn a risky investment in to a prudent one. If you are lucky enough, you could buy a house for 200 euro back then, if you entered the crypto world in 2012.

There are still some hurdles to overcome when using cryptocurrencies for this type of transaction. They include setting the price in bitcoin, or any other cryptocurrency, and calculating the taxes that will be due.

These types of operations are more common in Latam , many properties were already sold for crypto and there is more acceptance of these assets as payment methods.

Bank of Russia Rejects Idea of Using Cryptocurrency to Circumvent Sanctions

Bank of Russia believes it is impossible to use cryptocurrency to bypass financial restrictions that were imposed due to the conflict in Ukraine. This is according to Ksenia Yudaeva (first Deputy governor of the central bank), who responded to a proposal from a member the State Duma, which is the lower house in Russian parliament.

Anton Gorelkin is a lawmaker representing the ruling United Russia party. He suggested that Russian entrepreneurs and companies should be permitted to pay in digital currencies. This includes for settlementswith foreign partners. In response to Western sanctions, he believes the establishment of a Russian national cryptocurrency infrastructure is inevitable.

However, officials at the central bank believe that large-scale cryptocurrency transfers by Russian companies would be impossible. Yudaeva, quoted by the RIA Novosti news agency said that regulators in the EU, U.S.A, Japan, Singapore and Japan have begun to implement preventive steps.

She said that digital asset platforms like crypto exchanges have also adopted restrictions which prohibit Russian users from accessing funds. Even though crypto payments aren’t banned in some jurisdictions, authorities are increasing the standards of compliance for crypto service providers with customer identification rules.

The Central Bank of Russia ( CBR) is a strong opponent to the legalization of cryptocurrency. The financial authority proposed banning all crypto-related activities in Russia in January. It stated that bitcoin and other decentralized digital currencies cannot be used to pay for goods or services.

The CBR’s hardline stance has led to it being isolated from other government institutions in Moscow. The federal government approved in February a regulatory plan that was based on the concept of the Finance Ministry. This plan favors strict supervision over prohibition.

The ministry presented a bill entitled “On Digital Currency” that was designed to regulate the country’s cryptocurrency market. It was submitted just days before the Russian army crossed over the Ukrainian border. Alexander Yakubovsky (Russian lawmaker) suggested in mid-March that cryptocurrencies could be used to help Russia regain its global financial access.

Russia May Start Accepting Bitcoin For Oil & Gas Exports

Yesterday’s videotaped news conference was taped by Pavel Zavalny (chair of Russia’s Duma energy committee and President of Russian Gas Society). He reportedly stated in translation that Russia is more open to payment options for ‘friendly’ countries like China or Turkey.

He stated that Bitcoin and the country’s fiat currency were being considered for alternative payment methods to Russia’s energy exports.

He said in translated comments that he had been proposing to China since a long time to change to settlements using national currencies for rublesand the yuan. It will be the lira, rubles and Turkish yen.

The Russian Gas Society President added, “You can also trade bitcoins.”

According to reports, the price of cryptocurrency spiked at the same time as Zavalny’s comments were first reported yesterday.

The energy committee’s head also doubled down on Russian President Vladimir Putin’s pledge to demand that ‘unfriendly countries’ pay for gas in Russian rubles. Over concerns that Putin’s announcement might increase pressure on an already stressed energy market, European gas prices shot up.

In comments echoing the warning of the president, Zavalny stated that they should either pay in hard currency (which is gold for us) or as convenient for them, the national currency.

Despite all the recent announcements, it is fair to say that Russianow seems serious about moving away the dollar. The natural gas exporter could possibly convert energy reserves into assets that could be used beyond the dollar system.

It’s not clear, however, if Bitcoin’s relative inability to liquidity could support international trade transactions that large.

Bitcoin retraces the gains from yesterday as buyers turn to sellers today

Yesterday, Bitcoin’s price soared sharply. Pres. Obama’s executive order was the catalyst for Bitcoin’s rise. The executive order from Pres. Priorities include financial stability, responsible innovation, and maintaining the country’s financial edge.

These actions, and even more importantly the non-confrontational language seemed to open up the possibility of greater acceptance for digital currencies. The price moved strongly higher, closing above the 100 hour and 200-hour MAs in this process (see the blue and green lines in chart above).

It did not reach its 100-day MA at $42508 (see the blue line below on the daily chart). This was the goal for trading today. It was not to be.

The price has retraced all gains and is currently at $2700, which is below the $40000 mark. The current price is $39,261

The hourly chart at top of this post shows that the price fell below the 200-hour moving average (green line at $40,282) as well as the 100-hour moving average ($39,467) (blue line in chart above). The current price is $39,251, meaning that the bears have more control than the moving average levels. One attempt was made to push the price higher during the North American session, but sellers opposed the 200-hour moving average and drove the price down.

What’s next?

There are many ups and downs in the price action. This can be seen on both the hourly and daily charts. This is the nature of the beast.

The MAs on an hourly chart will be used to determine the risk/bias. Bearishness is greater below the 200- and 100-hour MAs. This is the current situation.

If you move above these MA, the bias will be in your favor. The focus will return to the 100-day MA at $43,509.

The bears will have the upper hand if this is not the case. They will be able to support themselves with next major support targets just above $37000 (from $37015 – $37169). If you move below this level, the door will open for more selling.