Crypto markets are recovering, and mining companies in North America are raking in the gains
- Bitcoin returned to above the $40,000 mark in August as the total crypto market cap hit nearly $2 trillion.
- Five North American crypto miners had generated 1,802 Bitcoins in June.
- The total crypto market capitalisation remains below $2.5 trillion, as recorded on May 11.
AdvertisementThe exodus of Bitcoin miners from China has not been easy, but the Asian Dragon’s loss is spelling gains for others around the world. In the US, five North American miners witnessed a 58% increase in the number of Bitcoins mined in July as compared to June.
Despite the ramp-up, Bitcoin’s market capitalisation is yet to return to its peak. However it is showing promising signs of recovery as Chinese miners come back online from new nodes located outside the country.
The total value of the crypto market value has broken the $1.9 trillion threshold for the first time since May, according to Coingecko — continuing the bullish trend that began on July 19.
China’s loss is North America’s gain
According to The Block Crypto, the boost for North American mining companies can be attributed to the clampdown in China and its policies that led to the shut down of rival companies in the region.
Crypto mining moves to North America
Source: Monthly production reports by the respective companies
|North American Mining Farm||June Bitcoin Production||July Bitcoin Production||Percentage Growth|
Marathon Digital, Riot Blockchain, Bitfarm, Argo Blockchain and Hut8, generated 1802 Bitcoins during June, at a time when the market continued a bullish trend for the first time since May.
However, not every US-based bitcoin mining firm was able to capitalise on China's policy change.
BIT Mining, BIT Digital and The9 City, which previously had mining operations inside China, have been materially affected. They are currently in the process of shipping out their machines to regions like Kazakhstan, Russia, and the US.
AdvertisementCryptocurrency billionaire and founder and CEO of FTX exchange Sam Bankman-Fried, has warned that the celebration could be short lived. The US’ crypto bill — the amendment to which did not clear the Senate on Monday — could push miners out of the country, according to him.
1) More last minute updates on the crypto tax bill!For context: https://t.co/ABSlsX2Crd— SBF (@SBF_FTX) 1628230819000
Market caps rise to two-month high
“The global cryptocurrency market cap today is $1.98 Trillion, a 4.2% change in the last 24 hours. Total cryptocurrency trading volume in the last day is at $150 Billion. Bitcoin dominance is at 43.8% and Ethereum dominance is at 19.1%. CoinGecko is now tracking 8,842 cryptocurrencies,” the industry tracker showed at the time of writing.
This is still short of the $2.5 trillion market cap that cryptocurrencies hit on May 11, which was followed by a drop on May 18, when China’s crackdowns intensified.
The ramp up is also linked to Ethereum’s London Hard Fork, which was released on August 5. This update brings a new mining system for Ether and reduces gas fees on the network, which allows more transactions to happen.
Ether’s price surged by 50% after the London hard fork as investors expected transactions and the price of the currency to grow post the update. According to Coinmarketcap, Ether crossed the $300 billion market cap on August 4, ahead of the new update.
Bull run returns?
The crypto market witnessed a bear phase since May after price corrections took place due to China’s crackdowns and regulatory pushback elsewhere. Big miners like Huobi Mall and BTC.TOP halted operations in the country and signalled their intention to move to other geographies.
On May 24, Bitcoin tumbled to $31,390, a four-month low at the time. It even dropped to sub-$30,000 levels temporarily in June, but has recuperated since. At the time of writing, Bitcoin’s price was around $46,307, which is still significantly below the $60,000 high it had hit earlier this year.
While investors and experts do seem bullish, some say it is too early to call this a bull run. Michael Boutros, a professional trader with a 15-year track record, sees considerable volatility ahead for bitcoin. The DailyFX technical strategist pegs Bitcoin to surge to $45,000 over the next two-three weeks before dropping to the $32,000 to $35,000 range.
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