El Salvador has started to mine Bitcoin utilizing the thermal energy of volcanoes. China’s cryptocurrency ban has had greater effects than expected. Brazil and Tonga are considering Bitcoin as legal tender. Elon Musk’s Tweet pumped Shiba Inu token. The fourth quarter of the year has begun.
El Salvador mines Bitcoin using volcano energy
In El Salvador, Bitcoin adaption has progressed fast and even better than expected. Two weeks ago, about 2 million Salvadorans had uploaded the Chivo cryptocurrency wallet. According to President Nayib Bukele’s tweet, this figure has already passed three million! This means that more Elsalvadors have access to a Bitcoin wallet than to a regular bank account.
El Salvador has also taken a step further in Bitcoin mining. Last Friday President Bukele tweeted a picture of the balance of a Bitcoin mining account. This means that El Salvador’s geothermal energy power plant has successfully mined its first Bitcoins.
In El Salvador, geothermal energy means generating electricity from the heat of volcanoes. This energy is 100% clean and renewable. El Salvador has several volcanoes, so there is a huge amount of energy available.
Here’s a teaser by president Bukele:
— Nayib Bukele (@nayibbukele) September 28, 2021
Bitcoin miners can be conveniently transported to even remote locations where energy is produced.
Bukele also tweeted that the project is still in the testing phase.
“Volcanode” in El Salvador is an excellent example of how cryptocurrencies can also be mined in an environmentally friendly way.
China’s crypto ban has bigger effects than expected
China has banned cryptocurrencies so many times that most crypto enthusiasts don’t pay too much attention to such news. The most recent ban was just over a week ago, and this time the news also seems to have wider effects.
We reported a week ago how cryptocurrency exchange Huobi decided to block its Chinese customers due to tightening regulations. Now two major Ethereum mining pools have announced their decision to close down.
BeePool and SharkPool made the announcements with an interval of one day. These mining pools cover more than 25 % of Ethereum mining. Both reported new regulations for the reason of closing down.
Here’s a video about the subject by Coin Bureau:
Giant Chinese online shopping platform Alibaba has also announced that it will stop selling mining equipment. In the future, all cryptocurrency-related activity will be illegal in China.
DeFi trading platforms (DEX, Decentralized Exchange) have received major traffic from Chinese customers. Popular DEX dYdX even surpassed Coinbase in trading volume. As large exchanges close their doors from the Chinese people, more and more traders are moving to decentralized exchanges.
Brazil and Tonga are considering Bitcoin as legal tender
El Salvador is not the only country, which could have Bitcoin as legal tender. There are many similar countries, especially in South America and Africa, which have considered Bitcoin as an alternative currency.
One potential country could be Brazil. This is one of the most populous countries in the world. The GDP of Brazil is at the same level as Russia or Australia. Brazil is now preparing a new Bitcoin-related law.
Here’s a video about the subject:
Bitcoin might be considered legal tender in Brazil. This would allow the currency to be regulated and controlled by the central bank. Many critics see this as a tool to control and tax the citizens.
Probable. They want to designate BTC as a "payment method" (alongside airline mile point systems) so that it may be "supervised" by the Brazilian central bank. Transactions will be covered by consumer protection laws. It may clear up some legal quandaries but that's it.
— Phillippe Yves-Cardinal (@PhilipeCardinal) October 4, 2021
The small country of Tonga is also planning to adopt Bitcoin as an official currency. In Tonga, Bitcoin could be of real benefit to citizens. More than 40% of the country’s GDP comes from money transfers from abroad (remittance market).
Money is sent through services like Western Union. These brokers charge processing fees of up to 50% of the transferred amount. Bitcoin and the lightning network would make it possible to transfer funds with zero fees.
The last quarter of the year started
The last quarter of the year started on the 1st of October. Historically, this quarter has seen lots of positive price action. Many analysts expect Bitcoin to have positive price development in the 4th quarter of 2021.
In 2013 and 2017, we saw parabolic price moves in the final quarter of the bull market. Bitcoin also broke a new all-time high price in the 4th quarter of 2020.
Plan B, the developer of the Stock-To-Flow model, released his own prophecy a few days ago. In the tweet below, you can see a recent version of the S2F model, the so-called Cross Asset Model. The color of the graphics reflects the strength of the market based on blockchain data.
On-chain analyses finished tonight: IMO we are midway, no sign of weakness (red) yet. Note color overlay is not months to halving but an on-chain signal. My guess: this 2nd leg of the bull market will have at least 6 more months to go. pic.twitter.com/HAEMYfQ1pT
— PlanB (@100trillionUSD) October 2, 2021
The ongoing halving cycle is undeniably nearing its end. If history repeats itself, there will be positive price movements for three to six months.
We should then expect a downturn for at least one year. At this point, it’s important to make sure your portfolio isn’t made up of small market cap altcoins. The price of such coins can easily crash by more than 95%.
However, not everyone has such a bright prediction for the rest of the year. In the video below, you’ll see Gareth Soloway’s comments. He is an expert who has predicted Bitcoin’s price development correctly throughout 2021.
Soloway believes that the peak of this cycle was $65,000 in May. He expects the price of Bitcoin to crash to $30,000 and lower.
Soloway has been right so far. However, his views are not supported by the on-chain data. Large investors have made huge Bitcoin acquisitions throughout the summer and early autumn. This will lead to a supply shock and a price really eventually.
You can keep track of the whales’ movements by following Will Clemente on Twitter.
Elon Musk’s tweet pumped Shiba Inu
Elon Musk has baffled crypto people with his tweets throughout the year 2021. In the spring, Musk caused big price rises in so-called meme coins. Dogecoin, which was originally started as a joke, ended up on the list of the top 10 cryptocurrencies.
Earlier this week, Musk tweeted a photo of his Shiba Inu pet dog. This had the expected effect: Shiba Inu (SHIB) token increased as much as 70 percent. The tweet also had a positive effect on the Dogecoin price, pumping it up around ten percent.
Floki Frunkpuppy pic.twitter.com/xAr8T0Jfdf
— Elon Musk (@elonmusk) October 4, 2021
Shiba Inu has a market cap of over $5 billion. It’s on its way to the top 30 rankings. Dogecoin, on the other hand, still holds a position in the top 10. It’s surprising how well these meme coins have held their market caps even during the bear market this summer.
The popularity of Shiba Inu and Dogecoin partly reflects the fact that retail investors still have faith in the continuation of the bull market. Many expect these coins to rise by several hundred percent over the next few months.