The U.S. government has been a major factor in the crypto market, and this is evident from how crypto prices have continuously been affected by the FED regulations. The recent Bitcoin EFT approval by the U.S. Securities and Exchange Commission (SEC) is perhaps one of the latest impacts of the U.S. government on the crypto market.
However, the most recent development has been the observation of Bitcoin mining by the United States government. Through the U.S. Department of Energy (DOE), the government is taking a closer look at bitcoin mining’s effects on the energy sector. DOE has tasked the Energy Information Administration (EIA) with collecting data on Bitcoin mining energy consumption in the U.S.
Crypto experts believe that the U.S. government is again trying to control the crypto market by stifling factors that spur the growth of this industry. According to DOE, the request to EIA has been marked “emergency,” citing ‘public harm’ as the major reason.
Crypto experts believe that the six months of collection of this data by EIA will probably have a stifling effect on Bitcoin if it will inform certain policies. In this regard, a reduction in the mining of Bitcoin will deter investors’ confidence. The impact will be felt across the market, where a plunge might be experienced.
BTC Mining High Energy Consumption
There is no doubt that Bitcoin mining is an energy-consuming activity. Although most miners are trying to incorporate green energy to power their operations, grid energy is still central in the mining. If the DOE comes up with data showing that BTC mining is increasing stress on the energy sector, it will be labeled ‘public harmful.’ More regulations might be set.
The impact on the BTC performance will be significant if the mining operation is regulated. According to experts, the demand for the available BTC might hit the roof. But this means the holding of the coins will grow bigger. The number of transactions might reduce as investors will tend to hold.
On the other hand, the growth rate of the BTC might start shrinking. The confidence in investors will have a widespread effect on the overall crypto market. The negative effect will definitely create a plunge, and coupled with other emerging factors, the bears might strike after the release of the EIA report.
Bitcoin To Remain Stable
Despite the new developments, Bitcoin is poised to remain stable for the next few months. There is no foreseeable alarm for a crypto crash, and the market seems relatively stable. Bitcoin is expected to trade above $40k for the remaining part of Q1 2024, with the project of a bull state in Q2. This is as the overall stock market gain rises from the 2022-2023 crash.
What To Expect in February
Crypto experts project a stable February, with Bitcoin projected to retest the $45k mark. This is after rebounding from a 39k plunge on 23rd January to trade above $43k as of this writing. With an all-time high of almost 47k, experts believe that BTC has the potential to reach +$50k this year despite the many bottlenecks by various regulators.
In conclusion, crypto investors can expect a relatively calm February and 2024. This is despite the Bitcoin mining uncertainty and challenges in the stock market. With the FED relaxing the interest rates, the stock market, including the crypto market, is expected to do well in the next few months.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Crypto Voles is not responsible for any losses from the information shared here. Readers are advised to exercise caution before taking any action related to the company.
