Even though Bitcoin (CCC:BTC-USD) is still the king of cryptocurrencies in terms of market capitalization, don’t get the wrong idea. As with all other crypto coins, Bitcoin involves great risk and price volatility.
I’m not trying to scare anyone away from investing in cryptocurrency.
Digital assets have a future, I believe, as some fiat currencies are rapidly losing their value due to inflation.
With Bitcoin, you can take a position in what might be the future of money. As we’ll discuss, however, deep price corrections are par for the course.
At the same time, the mainstreaming of digital assets is a movement of global proportions – including a (literally) red-hot development in Central America.
Analyzing the Bitcoin Price
Since the beginning of 2021, Bitcoin has moved very far but really hasn’t moved anywhere at all.
Let me explain. On Jan. 6, BTC was trading north of $36,000. Fast-forward to June 12, and the price is close to $35,500.
Thus, the year-to-date price movement has been minimal. At the same time, though, we could say that there’s been plenty of action.
On April 13, Bitcoin hit an all-time high of $64,863.10. In hindsight, we now know that this would have been a great time to take profits.
May was a particularly challenging month for BTC holders as the price tumbled to the $35,000 area.
Still, the bulls showed what they’re capable of – and for all I know, the next rally could be just around the corner.
In the meantime, enterprising investors can start to accumulate Bitcoin at what might be considered a discount price.
If it surges back to the previous peak price, then you might choose to take partial profits while keeping some skin in the game.
Evolving Fast
I’ll admit, I haven’t been following all of El Salvador President Nayib Bukele’s tweets.
One of them certainly caught my attention, though. Dated June 9, Bukele’s tweet is immodestly ambitious:
“I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos This is going to evolve fast!”
I hope you’ll forgive me if I omitted his volcano emoticon. I also left out Bukele’s attached photo, which appears to be a small factory belching smoke directly towards the ozone layer (I’m probably wrong about that).
But hey, I won’t begrudge Bukele’s bravado – or his ostensibly good intentions. Moreover, the build-out does indeed seem to be “evolving fast”:
“Our engineers just informed me that they dug a new well, that will provide approximately 95MW of 100% clean, 0 emissions geothermal energy from our volcanos Starting to design a full #Bitcoin mining hub around it.”
A Step Towards Acceptance
And there you have it: volcano-powered crypto mining. It’s an innovative concept, no doubt about that.
So, what does all of this mean for Bitcoin investors?
It won’t likely lead to a full and immediate recovery in the BTC price. Rather, it’s a step towards the global acceptance of a somewhat controversial form of money.
Some folks have voiced concerns over the high environmental cost of Bitcoin mining, and their concerns are duly noted.
Bitcoin mining consumes around 105 terawatt-hours of electricity per year globally, according to the Cambridge Bitcoin Electricity Consumption Index.
To put that amount into perspective, it exceeds all of the electricity used annually in the Philippines.
As powerful world nations work towards a more sustainable future, we can’t expect regulators to accept wasteful Bitcoin mining practices.
So, El Salvador’s (supposedly) clean cryptocurrency mining efforts are forward-thinking and commendable. Hopefully, more nations will consider implementing similar measures in the near future.
The Bottom Line
I found Bukele’s tweets to be strange and fascinating. The important thing, though, is that El Salvador is finding a potential solution to a persistent problem.
That problem is the heavy energy consumption involved in Bitcoin mining.
As nations consider clean-energy approaches, cryptocurrency adoption ought to increase – and the BTC price, in time, should revisit its prior high mark.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
