Russia is continuing its move towards becoming a major player in the crypto mining world, with the Komi Republic set to establish 15 new mining data centres. The first two centres in Mikun and Sindor will cost approximately $27.6 million. Backed by investors and a local power company, the project highlights Russia’s determination to strengthen its presence in the crypto space. While it remains unclear which cryptocurrencies will be mined, Bitcoin is expected to be the focus.
Komi’s cold winters and abundant natural resources, including oil and gas reserves, make it an ideal spot for crypto mining. This expansion follows the government’s efforts in Russia to regulate the industry, with President Vladimir Putin recently signing a law to legalise mining. Additionally, state-owned energy giant Gazprom has announced plans to build a large crypto mining centre, aiming for full capacity by 2028.
Once the hotspot for Russian miners, Siberia has seen a crackdown on illegal mining due to strain on local grids. As a result, miners are now looking to other regions like Komi to continue their operations.
MicroStrategy has significantly expanded its bitcoin holdings, acquiring $1.11 billion worth of the cryptocurrency between August 6 and September 12. The company now holds approximately 244,800 bitcoins, valued at $9.45 billion. The average purchase price was around $38,585 per bitcoin, including fees and expenses.
This aggressive move towards bitcoin began in 2020, as MicroStrategy sought to preserve its reserves amid declining revenue from its core software business. Its decision to prioritise cryptocurrency has drawn support from investors, linking the company’s stock performance to the fluctuating price of bitcoin.
The firm’s shares have more than doubled in 2024, while bitcoin itself has risen by nearly 31% year-to-date. The approval of spot bitcoin exchange-traded funds by the SEC, alongside backing from influential figures like Elon Musk, has contributed to the mainstream acceptance of the asset.
MicroStrategy also recently underwent a 10-for-1 stock split to increase accessibility for investors, further signalling its commitment to growth in the crypto space. Its ongoing bitcoin strategy reflects confidence in the long-term potential of the digital asset.
On Friday, US spot Bitcoin ETFs experienced a significant rise in inflows, totalling $263 million as Bitcoin’s price surged over $60,000. Fidelity’s Bitcoin ETF led the pack, pulling in $102 million, while ARK Invest and 21Shares followed closely with $99 million in net inflows. This marks a shift in sentiment after weeks of outflows, signalling renewed investor optimism in the crypto market.
Despite the positive inflows for most ETFs, BlackRock’s iShares Bitcoin Trust and WisdomTree’s Bitcoin Fund recorded no new investments. However, US spot Bitcoin ETFs collectively closed the week with more than $400 million in net inflows. This, combined with Bitcoin’s 12% price increase, reflects growing confidence in the market.
The wider cryptocurrency market also benefited, with Ethereum rising by 8% and altcoins like Toncoin, Chainlink, and Avalanche performing strongly. Investors remain hopeful as expectations build for a potential interest rate cut by the US Federal Reserve, which could further boost the crypto market.
US cryptocurrency shares fell after the recent presidential debate between Kamala Harris and Donald Trump. Harris criticised Trump, who has positioned himself as a pro-crypto candidate, while Trump promised friendlier crypto regulations if elected. Following the debate, pop icon Taylor Swift endorsed Harris, further influencing the political landscape.
Market analysts noted that while the debate didn’t directly address cryptocurrency, sentiment shifted in favour of Harris. That has created a less optimistic outlook for Bitcoin than Trump’s earlier promises of making Bitcoin a government-held asset. The crypto market remains volatile and faces regulatory scrutiny, but it has also gained mainstream attention due to backing from City institutions and key corporate figures.
As political uncertainty lingers, crypto stocks, including Riot Platforms, Marathon Digital, and Coinbase, experienced notable drops, with Bitcoin and ether also losing value. Experts anticipate continued volatility in the crypto sector until the November election.
Nasdaq is seeking regulatory approval to launch and trade options on a bitcoin index, offering institutional investors and traders a new way to hedge and amplify their exposure to the cryptocurrency. The United States Securities and Exchange Commission (SEC) has not approved options based on bitcoin-related exchange-traded funds (ETFs), including Nasdaq’s application to trade options on BlackRock’s $21.3 billion iShares Bitcoin Trust ETF.
The new bitcoin index options would provide a quicker and more affordable method for traders to gain access to the cryptocurrency market. Options are derivatives that allow the holder to buy or sell an asset at a set price by a predetermined date, making them a popular tool for traders and investors to manage risk and enhance liquidity.
Nasdaq’s proposed options would track the CME CF Bitcoin Real-Time Index, which monitors bitcoin futures and options contracts on the CME Group exchange. This development comes as institutional demand for bitcoin-based financial products grows despite the SEC’s slow approval process for options on newly launched spot bitcoin ETFs.
While awaiting regulatory decisions, traders have explored other products, such as leveraged ETFs tied to bitcoin. Exchanges initially applied for the spot bitcoin ETF options as soon as the SEC approved the underlying ETFs but have since adjusted their filings in response to the regulator’s comments.
Apart from the cryptocurrency-focused media, not many US news outlets have been providing this newsworthy coverage. The United States is home to more than 100 top cryptocurrency companies. In particular, the USA is home to the world’s second largest cryptocurrency exchange, Coinbase, which is a publicly traded company. Coinbase reported a USD 273 million profit in the fourth quarter of 2023. For the full year of 2023, it earned USD 95 million on USD 3.1 billion in revenue, while in 2022, it posted a loss of USD 2.6 billion. Apart from Coinbase, Marathon Mining, the largest US cryptocurrency mining operation, reported a staggering revenue increase of 229% to a record USD 387.5 million in 2023 from USD 117.8 million in 2022. Several policy proposals are before policymakers in the USA, trying to tackle issues related to the industry.
In late July 2024, Nashville, Tennessee (USA) was the stage of the largest annual bitcoin gathering. The Bitcoin Conference 2024 had one speaker that everyone awaited with anticipation. Republican Party candidate and the former US President Donald J Trump is the first high-end political figure in the USA who agreed to address the bitcoin crowd. Trump’s appearance was announced a couple of weeks before, and at that very moment the issue of cryptocurrency and the surrounding industry slipped into the main discussion among the candidates for the November US elections.
Back on the green
So, the industry is back on the green, regulation is discussed in the US Senate and Congress and the mining industry is growing. How come that industry is not discussed that much on the main political stage?
In Nashville, everything was ready for Trump’s appearance. The former president’s campaign trail advertised his appearance as one of the highlights of his July campaign. Anyhow, the crowd gathered at the Bitcoin Conference is not politically homogeneous. There are people on the complete opposite side of Trump’s proposed political spectrum. In the past, US cryptocurrency companies were one of the top contributors to the US Democratic Party (most prominently, Sam Bankman-Fried, now convicted, former CEO of the failed cryptocurrency exchange FTX).
Crypto vs bitcoin
Before I continue, let me give you a brief explanation. It is important, trust me.
In short, the cryptocurrency industry is divided into two strongly opinionated teams standing on opposite sides. Bitcoin adopters would almost never call themselves crypto enthusiasts. They consider other cryptocurrencies, cryptocurrency exchanges, and the entire idea of ‘blockchain technology changing the world’ to be false. For (true) bitcoiners, NFTs, meme coins, microtransactions, enormous overnight profits, and other ‘miraculous’ stories were considered nothing more than elaborate schemes for tricksters and scammers willing to sell innocent investors a story of the world-changing technology. And to be fair, that narrative kind of proved to be true. For years, US financial regulators have been waging war on cryptocurrencies and online cryptocurrency exchanges as ‘unregulated securities’ businesses. The US SEC has already won many cryptocurrency-related court cases for scam and fraud charges. On the other hand, the same regulatory agency has made a clear distinction between bitcoin and others. The SEC has officially stated that bitcoin cannot be considered a security but rather a commodity and that they will not pursue any bitcoin holders or bitcoin-only companies (in a court case back in 2019). This is thought to be due the decentralised nature of bitcoin. Unlike other cryptocurrencies, bitcoin does not have a CEO, headquarters, or hire anyone to work on its update. Bitcoin is simply an open-source protocol that handles digital value as unique information. Therefore, it cannot be defined as ‘a promise of profits’ to investors, which is the main argument of the famous Howey Test, a metric that has been used by the SEC to determine the scope of its work since the 1946 Supreme Court case.
This is the first point of difference recognised by regulators and one of the main arguments for Bitcoin as digital gold. Bitcoin can be used at a settlement level to create a future ‘digital gold standard’ mimicking the now abandoned ‘gold standard’ for the global economy. Bitcoiners argue that other cryptocurrencies and the industry as a whole have achieved a huge value transfer but fail to see any value creation (thus far). Court decisions worldwide have confirmed quite similar things.
Energy consumption in cryptocurrency
The second point of major disagreement between the two sides (crypto and bitcoin) is the way the industry is spending energy. Energy is the most frequently mentioned issue in the media coverage of cryptocurrency developments. You have heard and read numerous reports on the massive amount of energy used to mine (create) cryptocurrency and 99.5% of that energy is spent in bitcoin mining. The proof-of-work (PoW) algorithm, used in the bitcoin network for security reasons, requires miners to spend energy creating new bitcoins. Specialised mining equipment is often located near big power plants, and the pursuit of cheap electricity is the major driver of the industry. In contrast, the crypto industry, apart from bitcoin, has created a solution for such energy demand with the non-energy consuming Proof-of-Stake (PoS) algorithm for network security. Therefore, the crypto industry is now pointing to bitcoin as the sole reason why regulators are thinking about cryptocurrencies, as the green agenda worldwide becomes dominant. A couple of US legislators from the Democratic Party have filed several motions for a statewide ban on bitcoin mining as an energy demanding industry. As a counter-argument, bitcoiners say that the actual amount of energy spent for bitcoin creation gives it its power. In other words, energy spent in creation gives bitcoin an intrinsic value similar to physical gold.
It is important that these distinctions have been clarified in order to understand the scope of Trump’s address. With that, back to Nashville.
One of my friends who was in the audience told me that people who normally are not interested in politics were ecstatic and wanted to hear the first address of the US president to the bitcoin crowd. President Trump took the stage at the Bitcoin Conference 2024 and gave the crowd all they wanted to hear, and a bit more. He said that the AI and bitcoin industries are similar as they need the same thing: electricity. He made a promise to the United States to ramp up electricity production by a couple of folds, clearly setting his agenda on the opposite side of Democrat’s calls for mining bans. We want all bitcoins in the world to be created in the USA, he said. ‘We will be creating so much electricity that you’ll be saying: Please, please president, we don’t want any more electricity…’
He immediately followed with the promise to relieve Mr Gary Gensler, the current chairman of the US SEC. Actually, he would do it on his first day in the office. He promised that the bitcoin and crypto industry would stay in the USA. But one of the most dazzling promises for all bitcoiners attending was his announcement that the USA might start accumulating bitcoins as for future global trade. The crowd was overwhelmed, as he confirmed that the idea of bitcoin as digital gold had finally received approval from the top policymaker, let alone the former (and possibly future) president of the United States. Later during the conference, plans were elaborated on how such a thing can be done. If true, this could indeed play a significant role in the worldwide adoption of bitcoin as a global store of digital value. Having in mind that the future global economy will certainly be digital, such a thing is actually quite possible and logical. Ultimately, it is a matter of political will to create such a strong global independent currency not related to the reigning central banking system. ‘Bitcoin will probably overtake gold (market), there was never anything like it… it’s not only a marvel of technology but the miracle of (human) corporation.’ To back that up, Trump reiterated that he would halt the development of the US Central Bank Digital Currency (CBDC).
Trump finished with the best wishes for all: ‘We will make America and bitcoin bigger, better, stronger, richer, freer, and greater than ever before… Have a good time with your bitcoin and your crypto and everything else you’re playing with.’
The moment he said it, the crowd suddenly became colder. They realised that he was not aware of the distinction between bitcoin and crypto. Actually, he might just populistically say what crowds want to hear, and the moment the script was taken off the teleprompter, he could not tell the difference between the two.
This was for sure the event that launched issues surrounding bitcoin and cryptocurrency in the US elections race, as more and more young voters are getting to the polling stations and the idea of the independent global currency becomes not so utopian and high-end tech issue. In any case, we will have to wait and see which of those promises are actual future policies and which part plays the role of enchanting the masses. Open-source software, energy consumption, and consumer protection will be discussed in detail in the future.
At a crypto convention in Nashville, Tennessee, in late July, Donald Trump urged attendees to ‘never sell your bitcoin.’ The speech he held is part of his strategy to attract crypto-focused voters as the November election approaches, and it includes a proposal for a state bitcoin reserve. Trump promised that, if elected, his administration would retain all bitcoin the US government currently holds or acquires in the future, forming a ‘strategic national bitcoin stockpile.’
Trump is not alone in this vision. US Senator Cynthia Lummis has proposed legislation for the government to buy one million bitcoins, around 5% of the total supply. In comparison, independent candidate Robert F. Kennedy Jr. has suggested a stockpile of four million bitcoins. The US government already holds approximately $11.1 billion worth of cryptocurrency, mainly from criminal seizures such as the Silk Road shutdown in 2013.
Currently, the US government possesses about 1% of the global bitcoin supply, which is capped at 21 million coins. Comparatively, private investors like Microstrategy hold around 226,500 bitcoin tokens, while BlackRock’s iShares Bitcoin Trust and Grayscale Bitcoin Trust hold 344,070 and 240,140 tokens, respectively. A government bitcoin reserve could influence bitcoin’s price positively but might also limit the number of tokens available for trading.
Why does this matter?
Despite the uncertainty of a national bitcoin reserve’s implementation, experts are speculating its possible structure. One idea is for the Federal Reserve to manage the reserves for the Treasury Department, similar to gold reserves. Another possibility is a structure akin to the Strategic Petroleum Reserve, with control shared between the president and Congress.
While the concept of a state-controlled bitcoin reserve conflicts with the decentralised nature of cryptocurrency, its increasing prominence in political campaigns is welcomed by the industry. Market players anticipate that both political parties will continue to focus on digital assets beyond the upcoming election.
Bitcoin and ether tumbled to their lowest levels in months on Monday as concerns about a potential US recession triggered a selloff in riskier assets and a flight to safer investments. Both cryptocurrencies, which had previously gained from the approval of a spot bitcoin and ether exchange-traded fund by the US Securities and Exchange Commission, are now facing significant losses.
Bitcoin dropped 13% to $51,560, its largest one-day decline since November 2022, while ether fell 17% to $2,277, its lowest since mid-January. The drop is part of a broader downturn affecting global equities and other assets, with bitcoin losing over a third of its value since reaching an all-time high in March.
Market analyst Tony Sycamore noted that bitcoin is approaching critical support levels around $54,000 to $53,000, and failure to maintain this support could lead to further declines towards $48,000. The broader impact is also visible in the stock market, where shares of crypto-related companies like Coinbase, Riot Platforms, and Marathon Digital have plummeted in early trading, reflecting the broader sentiment in the crypto market.
Shares of New York-listed cryptocurrency companies surged on Monday following Donald Trump’s endorsement of bitcoin and his promise of more favourable regulations if elected.
Coinbase shares climbed 3.7%, while Bitfarms, Riot Platforms, and CleanSpark saw gains ranging from 3.4% to 4.5%. Analysts at Bernstein noted that the crypto market is optimistic about a potential Trump victory, especially compared to the current Biden administration’s stricter regulatory stance.
Crypto executives have frequently criticised the Biden administration’s oversight, although SEC Chair Gary Gensler defends it due to bitcoin’s volatility and speculative nature. Despite these regulatory hurdles, cryptocurrency has gained mainstream acceptance, with support from institutional investors and ETFs linked to bitcoin and ether prices.
Why does it matter?
A Trump victory could provide a further boost to the industry. He recently suggested creating a national bitcoin stockpile and expressed interest in mining all remaining bitcoin in the US. Bitcoin rose by up to 2.4%, hitting its highest level since mid-June.
Former US President Donald Trump, who once called cryptocurrency a ‘scam,’ is now headlining the Bitcoin 2024 convention in Nashville. He will speak on the final day of the three-day event, joining other prominent figures such as Republican former candidate Vivek Ramaswamy, Senator Bill Hagerty, and Senator Cynthia Lummis. The convention also includes Democratic Representative Ro Khanna of California.
The cryptocurrency industry is bouncing back after significant setbacks in 2022, including the collapse of FTX. Proponents argue that crypto users are becoming a significant political force, with the Republican Party courting their votes by promising lighter regulation. The shift has seen major pro-crypto political action committees raise over $230 million to support favourable candidates.
Trump’s appearance at the convention marks a notable shift in his stance on crypto. He has recently criticised Democratic regulatory efforts and expressed support for increased bitcoin mining in the US. That support has been well-received by the crypto industry, which has faced increased scrutiny from the Biden administration. As the crypto community rallies around supportive politicians, Trump’s new embrace of the industry is seen as a strategic move to align with emerging political forces.
