With the surge in the price of Bitcoin (BTC), the demand for the coin has grown significantly, placing enormous pressure on mining activities. At the same time, there has been an intense use of energy from national grids to meet this demand. According to a report from S&P Global insight, the Bitcoin Energy Consumption Index is close to breaching its All-Time High (ATH).
Bitcoin Price and Energy Usage
As BTC continues on its upward journey, miners will continually face the challenge of meeting the demand. To estimate the true impact, S&P Global relied on the energy demands of the Antminer S19 Pro in powering BTC mining operations. The average benchmark for the miner is 110 TeraHashes per second (TH/s) and it consumes 3.25 KW.
With this benchmark, the Bitcoin energy consumption index dropped from its ATH of 1,230 MWh attained on November 22 to a December low around 1100 MWh. Per the latest update, this figure has reversed its course and making a defined move toward the previous high.
This fluctuation reflects has impacted the Bitcoin mining profitability for the top featured countries in the European Union. As highlighted, Spain and Germany are “Out of the Money” amid higher demand and colder temperatures boosting the gas-for-power demand across the major European power markets.
While recent strong output in wind energy pushed flipped bitcoin mining profitability to in-the-money of $75.24/MWh and $68.24/MWh for Germany and Spain, headwinds remains on the horizon. With changing market trends, the Swiss Canton of Bern is exploring the impact of mining on the grid as reported earlier by Coingape.
Business Diversity to Boost Output
BTC mining operations are mostly concentrated out of Europe with North America pushing to take the lead. In order to boost their productivity, Bitcoin miners are directly buying BTC from the open market.
As reported earlier, Hut 8 plans to raise $500 million, a sum that will help it boost its strategic BTC reserve.
Since the Bitcoin halving event, firms have reduced benefit from directly mining the coin. The strain on electricity grids and energy sources as winter sets in has also called for more defined diversification strategy.
Beyond Hut 8, MARA Holdings is also buying BTC with the latest update earlier this week hinting the firm plans to raise $700 million to boost its Bitcoin portfolio. Amid the positive trends around the coin, it has jumped back above the $100,000 mark after BTC price slipped below this level on December 5.
As of writing, it was trading for $101,536.02, up 0.69% in 24 hours.
The post Bitcoin Energy Consumption Index Eyes ATH, Here’s Its Implication appeared first on CoinGape.
