Bitcoin’s energy consumption remains a contentious issue, with its vast network of miners demanding significant computational power. Recent trends indicate an uptick in Bitcoin’s power usage, driven not only by mining but also by increased network activity.
The cryptocurrency’s blockchain bandwidth usage recently exceeded 90% for the first time since its halving event in April. This surge is largely due to the adoption of new token standards such as Runes and BRC20, which have triggered a substantial number of transactions. While this rise in activity showcases Bitcoin’s growing adoption, it also raises concerns about its environmental impact. Bitcoin mining already consumes a considerable amount of energy, and heightened network activity could exacerbate this issue.
Back in 2018, there were grim predictions that Bitcoin’s energy consumption would surpass that of the entire world by 2021. However, these forecasts have not materialized, largely due to advancements in mining equipment efficiency and the increasing use of renewable energy sources in mining operations. These developments have proven initial forecasts to be overly pessimistic and have highlighted the industry’s technological advancements and shifts in energy sources.
Exploring more energy-efficient mining practices and developing solutions to optimize network activity are critical for the long-term sustainability of Bitcoin.
Meanwhile, Bitcoin’s price recently dropped below $64,000, triggering a wave of liquidations in the crypto market. Over $27 million worth of Bitcoin long positions were liquidated within 24 hours, with total liquidations across the cryptocurrency market exceeding $132 million. This sharp price correction has ignited a debate among investors about Bitcoin’s future trajectory. Bearish analysts point to on-chain data suggesting that some large Bitcoin holders have been selling off their positions, signaling a potential downward trend. In contrast, bullish investors argue that the current dip is a healthy correction before Bitcoin potentially targets the $100,000 mark.
What is certain is that interest in Bitcoin remains strong, with traditional finance increasingly eager to gain exposure to the digital asset. Vaneck, a global asset manager, recently listed Australia’s first Bitcoin ETF (VBTC) on the Australian Stock Exchange (ASX), boosting demand for cryptocurrency investments in the Asia-Pacific region. This launch follows the rollout of six Bitcoin and Ethereum ETFs in Hong Kong in April, further solidifying the region’s embrace of digital assets.
Interest in Bitcoin ETFs in Australia is evident, with Vaneck’s survey revealing that three-quarters of financial advisers in the country have received inquiries about Bitcoin from their clients. Additionally, a third of these advisers are considering adding Bitcoin ETFs to their clients’ portfolios if they become available on the ASX. On its debut trading day, the VBTC ETF traded 96,476 shares, generating a trading volume of $1.3 million (A$1.9 million). While this is much lower than the debut trading volumes of spot Bitcoin ETFs in the United States, Vaneck remains optimistic about the ETF’s growth potential in Australia, citing strong interest from both retail and professional investors.
The enthusiasm for crypto ETFs is not limited to Australia. Hong Kong, for instance, became the first Asian jurisdiction to launch spot ETFs for both Bitcoin and Ether in April. While the initial market response to these ETFs was lukewarm, it’s important to note that the Hong Kong market is considerably smaller than the US market, where Bitcoin ETFs have seen large inflows.
While Singapore maintains a cautious stance on crypto ETFs, other countries in the region are gradually opening up to these investment vehicles. Thailand, for example, recently approved its first Bitcoin ETF, exclusively available to institutional and wealthy investors. Malaysia, although not yet offering spot ETFs, has also entered the digital asset investment space with a fund targeting Bitcoin, Ether, and blockchain companies.
Bitcoin’s journey continues to be marked by volatility, innovation, and growing institutional interest. The interplay between its energy consumption, price fluctuations, and the adoption of investment products like ETFs will shape its future trajectory in the global financial landscape.
