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Bitcoin

Bitcoin is Near All-Time Highs and the Mainstream Doesn’t Care…Yet

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Bitcoin Google Trends Mainstream

Bitcoin Near All-Time Highs vs. Search Interest

Just about every financial asset saw a huge drop in March, but few have had the spectacular recovery that bitcoin has had since then.

Up more than 300% from the March lows, bitcoin is within $1,000 of its all-time high ($19,891) established three years ago. While 2017’s run-up saw a huge surge in Google searches, interest this time around is less than a quarter of what it was back then.

This graphic overlays bitcoin’s price changes against Google search interest for “bitcoin” between 2017-Nov 2020, showing the muted relative search interest for its recent rally. Despite Google search interest being low, it is turning upwards, potentially hinting at a rise to cap off 2020.

Nobody’s Searching? Maybe Bitcoin is Already Mainstream

Bitcoin’s mainstream attention in 2017 was exceptional, and was likely the first time many people had even heard about the digital asset.

After doing all of their Google research back then, it’s possible that the general population is now well aware of the cryptocurrency and doesn’t need to search up the basics again. Add to this that bitcoin is now easily purchasable through popular services like Robinhood and Paypal, and you have fewer people who need Google to figure out the intricacies of bitcoin wallets and transactions.

While people might not be searching for information on bitcoin, the media has certainly picked up on its movement over the past year. Mainstream coverage regarding the cryptocurrency is currently at a relative all-time high for the past 12 months.

Mainstream Media Mentions of Bitcoin

Even if current mainstream coverage isn’t far from previous peaks, it’s still likely that people are seeing an increase in bitcoin content in their news feeds following the recent surge.

This rally is also attracting increased talk on social media sites like Twitter. That said, while there has been a rise in the volume of bitcoin-related tweets in November 2020, numbers are still quite low compared to the amount of tweets in 2017.

Tweets mentioning Bitcoin

Daily tweet volume reached above 60,000 recently, but is still far from the +100,000 daily tweets that were being sent at the top of 2017’s bull run.

Where in the World is Google Search Interest for Bitcoin?

Even if worldwide search interest isn’t as high as it was in 2017, there is one country where bitcoin is being googled more now: Nigeria.

Since 2015, the Nigerian Naira has lost more than 50% of its value against the U.S. dollar. This, coupled with the country’s high share of unbanked citizens means that alternative currencies and payment methods have steadily risen in popularity and utility.

Nigeria Bitcoin Google Search Trends

FinTech startups like Chipper Cash are providing Nigeria and other African nations with no-fee P2P payment services, along with the ability to trade bitcoin. The service is also beta testing the buying and selling of fractional shares of popular U.S. stocks.

Started up in 2018, Chipper Cash’s monthly payment values are now over $100 million, and the company has attracted investment from top VC funds like Bezos Expeditions as they provide a valuable service in an emerging market.

If Bitcoin is Mainstream, Where Does It Go From Here?

While bitcoin is proving itself to be a useful medium of exchange around the world, it’s still primarily a speculative asset. As 2020 saw massive increases in money supply across the board, bitcoin reacted best compared to other speculative assets, with its ascent to $19,000 almost completely uninterrupted since the $10,000 price area.

Time will tell if 2017 is set to repeat itself, or if bitcoin is getting ready to set new all-time highs going into 2021.

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Energy

Visualizing the Power Consumption of Bitcoin Mining

Bitcoin mining requires significant amounts of energy, but what does this consumption look like when compared to countries and companies?

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Visualizing the Power Consumption of Bitcoin Mining

Cryptocurrencies have been some of the most talked-about assets in recent months, with bitcoin and ether prices reaching record highs. These gains were driven by a flurry of announcements, including increased adoption by businesses and institutions.

Lesser known, however, is just how much electricity is required to power the Bitcoin network. To put this into perspective, we’ve used data from the University of Cambridge’s Bitcoin Electricity Consumption Index (CBECI) to compare Bitcoin’s power consumption with a variety of countries and companies.

Why Does Bitcoin Mining Require So Much Power?

When people mine bitcoins, what they’re really doing is updating the ledger of Bitcoin transactions, also known as the blockchain. This requires them to solve numerical puzzles which have a 64-digit hexadecimal solution known as a hash.

Miners may be rewarded with bitcoins, but only if they arrive at the solution before others. It is for this reason that Bitcoin mining facilities—warehouses filled with computers—have been popping up around the world.

These facilities enable miners to scale up their hashrate, also known as the number of hashes produced each second. A higher hashrate requires greater amounts of electricity, and in some cases can even overload local infrastructure.

Putting Bitcoin’s Power Consumption Into Perspective

On March 18, 2021, the annual power consumption of the Bitcoin network was estimated to be 129 terawatt-hours (TWh). Here’s how this number compares to a selection of countries, companies, and more.

NamePopulation Annual Electricity Consumption (TWh)
China1,443M6,543
United States330.2M3,989
All of the world’s data centers-205
State of New York19.3M161
Bitcoin network -129 
Norway5.4M124
Bangladesh165.7M70
Google-12
Facebook-5
Walt Disney World Resort (Florida)-1

Note: A terawatt hour (TWh) is a measure of electricity that represents 1 trillion watts sustained for one hour.
Source: Cambridge Centre for Alternative Finance, Science Mag, New York ISO, Forbes, Facebook, Reedy Creek Improvement District, Worldometer

If Bitcoin were a country, it would rank 29th out of a theoretical 196, narrowly exceeding Norway’s consumption of 124 TWh. When compared to larger countries like the U.S. (3,989 TWh) and China (6,543 TWh), the cryptocurrency’s energy consumption is relatively light.

For further comparison, the Bitcoin network consumes 1,708% more electricity than Google, but 39% less than all of the world’s data centers—together, these represent over 2 trillion gigabytes of storage.

Where Does This Energy Come From?

In a 2020 report by the University of Cambridge, researchers found that 76% of cryptominers rely on some degree of renewable energy to power their operations. There’s still room for improvement, though, as renewables account for just 39% of cryptomining’s total energy consumption.

Here’s how the share of cryptominers that use each energy type vary across four global regions.

Energy SourceAsia-PacificEuropeLatin America
and the Caribbean
North America
Hydroelectric65%60%67%61%
Natural gas38%33%17%44%
Coal65%2%0%28%
Wind23%7%0%22%
Oil12%7%33%22%
Nuclear12%7%0%22%
Solar12%13%17%17%
Geothermal8%0%0%6%

Source: University of Cambridge
Editor’s note: Numbers in each column are not meant to add to 100%

Hydroelectric energy is the most common source globally, and it gets used by at least 60% of cryptominers across all four regions. Other types of clean energy such as wind and solar appear to be less popular.

Coal energy plays a significant role in the Asia-Pacific region, and was the only source to match hydroelectricity in terms of usage. This can be largely attributed to China, which is currently the world’s largest consumer of coal.

Researchers from the University of Cambridge noted that they weren’t surprised by these findings, as the Chinese government’s strategy to ensure energy self-sufficiency has led to an oversupply of both hydroelectric and coal power plants.

Towards a Greener Crypto Future

As cryptocurrencies move further into the mainstream, it’s likely that governments and other regulators will turn their attention to the industry’s carbon footprint. This isn’t necessarily a bad thing, however.

Mike Colyer, CEO of Foundry, a blockchain financing provider, believes that cryptomining can support the global transition to renewable energy. More specifically, he believes that clustering cryptomining facilities near renewable energy projects can mitigate a common issue: an oversupply of electricity.

“It allows for a faster payback on solar projects or wind projects… because they would [otherwise] produce too much energy for the grid in that area”
– Mike Colyer, CEO, Foundry

This type of thinking appears to be taking hold in China as well. In April 2020, Ya’an, a city located in China’s Sichuan province, issued a public guidance encouraging blockchain firms to take advantage of its excess hydroelectricity.

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Technology

Mapped: Cryptocurrency Regulations Around the World

Cryptocurrency regulations are essential for the future of digital finance, making it more attractive for businesses, banks, and investors worldwide.

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Cryptocurrency Regulations Around the World

Mapped: Cryptocurrency Regulations Around the World

Following the unprecedented cryptocurrency boom in 2017, investors and governments alike could no longer ignore the growth of decentralized finance.

The world has become increasingly fascinated with cryptocurrencies and the ways they are enabling greater access, such as being able to send funds to remote places or securing capital for small businesses.

To aid this, cryptocurrency regulations are being slowly introduced into global financial markets. Regulations help to monitor these emerging digital currencies, and to allow for clearer guidelines and a measure of security.

The Regulatory Landscape

Today’s graphic from ComplyAdvantage maps out major regulatory cryptocurrency and exchange landscapes around the world, showing how sentiments towards digital currencies are evolving.

To do this, ComplyAdvantage measured cryptocurrency regulatory environments using their own Light-to-Tight scale, based on the following criteria:

  • Cryptocurrencies and exchanges status? (Ban = 3 points, Regulated = 2 points, Grey Area = 1 point)
  • Cryptocurrency considered legal tender? (Yes = 1 point, No = 0 points)
  • Planned legislation to increase crypto regulation? (Yes = 1 point, No = 0 points)

Which jurisdictions have the strictest and most relaxed regulations for cryptocurrencies?

Regulations by Region

Global attitudes towards the rise of cryptocurrencies have shifted greatly over the past few years. While the term cryptocurrency is a bit of a misnomer, some countries do consider digital currencies legal tender, with many viewing cryptocurrencies as commodities.

Below is a table of the major countries that are pursuing cryptocurrency regulations:

CountryCryptocurrenciesExchangesInitial Coin Offerings (ICOs)
AustraliaLegal; treated as propertyLegal, must register with AUSTRACRegulated
SwitzerlandLegal; generally accepted as paymentLegal, regulated by SFTARegulated
MaltaNot legal tenderLegal, regulated under the VFA ActRegulated
EstoniaNot legal tenderLegal, must register with the Financial Intelligence UnitRegulated
GibraltarNot legal tenderLegal, must register with the GFSCRegulated
LuxembourgNot legal tenderLegal, must register with the CSSFRegulated
CanadaNot legal tender; some retailers accept as paymentLegal, regulation varies by province; final federal regulations expected late 2019Regulated
MexicoLegal, accepted as payment in some contextsGrey area; first crypto exchange in opened mid 2019Regulated
LithuaniaNot legal tenderLegal, must register with the Lithuanian Finance MinistryGrey area
United StatesNot legal tender; some retailers accept as paymentLegal, regulation varies by state; SEC expected to publish updated crypto regulations late 2019Grey area
UKNot legal tender; considered assetsLegal, registration requirements with FCAGrey area
RussiaNot legal tenderGrey area; regulations to be determined by the end of 2019Grey area
JapanLegal; treated as propertyLegal, must register with the Financial Services AgencyGrey area
NigeriaLegalGrey area; regulations upcoming from Central Bank of NigeriaGrey area
SingaporeNot legal tenderLegal, no registration requiredGrey area
South KoreaNot legal tenderLegal and regulated, must register with FSSBanned
IndiaNot legal tender; digital rupee may be in the worksEffectively illegal, but global and federal regulations being consideredBanned
ChinaBitcoin considered property; all other cryptocurrencies bannedIllegal, but a global regulatory framework being consideredBanned

Sources: ComplyAdvantage, HedgeTrade, CoinDesk

Asia

Japan has one of the most progressive regulatory climates for cryptocurrencies, widely considering bitcoin as legal tender and passing a law in mid-2017 recognizing cryptocurrencies as legal property. In late 2018, Japan also approved self-regulation for the crypto industry.

By contrast, China currently has one of the most restrictive environments in the world for cryptocurrency. China banned bitcoin transactions in 2013, as well as ICOs and crypto exchanges in 2017─though many have found workarounds through sites not yet firewalled.

Europe

Cryptocurrency and exchange regulations in the EU are determined by individual member states, and are considered legal across the bloc.

Digital currency offers great promise, through its ability to reach people and businesses in remote and marginalized regions.

—Christine Lagarde, Managing Director of IMF

Perhaps unsurprisingly, Switzerland has one of the most open climates for cryptocurrencies and exchanges in Europe. In 2016, the city of Zug, known as “Crypto Valley”, started accepting bitcoin as payment for city fees. Swiss Economics Minister Johann Schneider-Ammann announced his goal in 2018 to make Switzerland the world’s first “crypto-nation”.

North America

Both Canada and the U.S. take a similar approach to cryptocurrency legislation at the federal level, as both countries view cryptocurrencies as securities. However, provincial and state regulations differ widely in their taxation requirements of profits from crypto investments.

Latin America

Regulations throughout Latin and South America run the full legislative spectrum.

  • Bolivia: unilateral ban on cryptocurrencies and exchanges
  • Ecuador: the first country to launch its own token; ban on all cryptocurrencies aside from its government-issued SDE token (Sistema de Dinero Electrónico = electronic money system)
  • Mexico, Argentina, Brazil, Chile: cryptocurrencies widely accepted as payment
  • Venezuela: cryptocurrencies widely accepted; this makes sense, considering the economic crisis and subsequent freefall of the bolívar

The Importance of Cryptocurrency Regulations

Cryptocurrency’s journey is the story of a technology rapidly outpacing the laws that govern it.

Governments around the world are keenly aware of this problem. Members of the G20 published a request in June 2019 for a global regulatory framework for cryptocurrencies to be implemented to better manage the benefits and challenges that cryptocurrencies bring.

Regulation for both cryptocurrencies and crypto exchanges is essential for the future of digital finance─bringing legitimacy to the digital financial market, and making it more attractive for new businesses, established banks, and investors worldwide to more easily conduct business within this emerging ecosystem.

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