Is XRP on the Brink of a 50,000% Rally? Signs Point to Yes, Says Top Analyst

On August 15, the International Monetary Fund (IMF) released a report titled “Carbon Emissions from AI and Crypto Are Surging and Tax Policy Can Help.” The report calls for a significant increase in electricity taxes for crypto miners and AI data centers.

The IMF argues that the proposed tax would incentivize more sustainable practices and align these industries with global carbon reduction goals.

Rising Carbon Costs: IMF Targets Crypto and AI with New Levy Recommendations

In its report, the IMF recommends a tax of $0.047 per kilowatt hour to incentivize the crypto mining industry to reduce emissions in line with global targets. The report further mentions that if the impact of air pollution on local health is also considered, the recommended tax rate would increase to $0.089. This adjustment represents an 85% hike in the average electricity cost for miners.

Meanwhile, it suggests a slightly reduced tax of $0.032 per kilowatt-hour for AI data centers. This lower rate is attributed to the fact that such centers typically opt for locations with greener electricity sources.

The report highlighted the growing carbon footprint of these industries, which together accounted for 2% of global electricity demand in 2022. Projections suggest this could rise to 3.5% by 2025. According to the IMF, this figure is “equivalent to the current consumption of Japan,” which is “the world’s fifth largest electricity user.”

Bitcoin Mining’s Green Evolution: Experts Challenge IMF’s Findings

Industry leaders, however, have responded with sharp criticism. Daniel Batten, a Bitcoin environmental analyst and Marathon Digital advisory board member, described the IMF’s report as misleading and poorly researched. He accused the IMF of unfairly associating the carbon impact of AI data centers with Bitcoin mining, ignoring the crypto industry’s significant advancements in sustainability.

Furthermore, Batten emphasized that the IMF’s approach oversimplifies the issue by failing to distinguish between AI data centers and crypto mining operations. While both sectors are energy-intensive, they differ in how they consume energy and their environmental impacts.

Batten noted that the IMF’s report also overlooks the potential environmental benefits of crypto mining when managed responsibly. He cited a report by the Digital Assets Research Institute that indicates that “as price and hashrate grow, Bitcoin mining emissions have not grown.”

The past few years have seen some jurisdictions, such as Venezuela and Iran, banned crypto mining in their countries, citing power issues. However, it is important to note that miners nowadays actively seek efficient and sustainable Bitcoin mining, with some utilizing excess or wasted energy.

A January report by Coinshares also supports this approach. It noted that Bitcoin mining consistently seeks the most affordable energy sources. This sector often utilizes stranded energy that cannot be easily integrated into the existing power grid, usually by tapping into renewable energy projects in remote areas.

Consequently, there is an increasing trend of Bitcoin mining operations using electricity from sustainable sources. In his previous report, Batten estimated that approximately 52.6% of the energy consumed by Bitcoin mining operations is now renewable. This figure is higher than the finance industry’s use of sustainable energy, estimated at 40%.

The crypto market continues to be influenced primarily by broader macroeconomic conditions, with the latest US Consumer Price Index (CPI) report providing a glimmer of optimism for risk assets, including cryptocurrencies.

Crypto Awaits Fed’s Move

According to a recent Coinbase report, the slightly softer-than-expected July CPI print of 2.9% year-over-year – the lowest level in three years – has “calmed market concerns and reinforced expectations of impending Fed rate cuts at the September 17-18 Federal Open Market Committee (FOMC).

Per the report, this has been viewed as positive news for risk sentiment, as it may help dispel fears of a potential US recession, which Coinbase believes is more important than the total size of Fed cuts this year.

However, the crypto market has remained range-bound, with Bitcoin (BTC) unable to break through the $61,000 level. Sentiment has slowed due to a lack of crypto-specific catalysts, and perpetual futures funding rates in BTC have turned negative this week, potentially indicating lower trader activity.

In the Ethereum (ETH) ecosystem, gas prices have slumped, which could signal a decline in network activity. On a more positive note, spot Ethereum ETFs in the US have seen inflows this week.

ETF Inflows Signal Strong Institutional Interest

The report also highlighted the growing institutional adoption of crypto, as evidenced by the latest 13-F filings for US spot Bitcoin ETFs. The data, which captures the state of institutional ownership as of June 30, 2024, reveals notable new holders such as Goldman Sachs ($412 million) and Morgan Stanley ($188 million).

The ETF complex saw net inflows of $2.4 billion during this period, despite a drop in total assets under management (AUM) from $59.3 billion to $51.8 billion, due to Bitcoin’s price decline from $70,700 to $60,300.

Nonetheless, Coinbase analysts believe the continued ETF inflows during Bitcoin’s underperformance may be a “promising indicator of sustained interest in crypto from the new pools of capital that the ETFs give access to.”

They also expect the proportion of investment advisor holdings to increase as more brokerage houses complete their due diligence on these funds.

Looking ahead, the report notes that the stage is set for market dynamics to be tested at the upcoming Jackson Hole Economic Symposium, a pivotal event that could sway sentiments and shape the trajectory of crypto markets.

While short-term fluctuations and market slowdowns may dampen immediate enthusiasm, Coinbase highlights the underlying currents of institutional interest and the evolving landscape of ETF inflows that paint a promising picture for crypto prices for the rest of the year.

At the time of writing, BTC is trading at $59,679, regaining the top of the range seen in recent days between $57,000 and $60,000.

Featured image from DALL-E, chart from TradingView.com

Bitcoin’s price chart is mirroring patterns seen in previous United States election years, and its recent lack of momentum could be completely reversed, according to a cryptocur analyst.

“Bitcoin has seen the same sort of structure” crypto analyst Matthew Hyland pointed out in an Aug. 16 analyst video. He explained that Bitcoin’s recent extended consolidation followed by a downturn is similar to patterns seen in 2012, 2016, and 2020 ahead of U.S. presidential elections.

Crypto analyst highlights similar patterns in previous election years

“I’ll go back to August 2012, a massive crash right here. Then we slowly moved into the election, before moving up drastically after the election,” Hyland added.

“This sort of path is what i’m expecting. A little choppy, nothing too crazy, then probably October, November, we’ll move out of this range,” Hyland added, while predicting that Bitcoin’s price wremain in its current range for “a little bit longer.” The 2024 US presidential election is scheduled for November 5.

The upcoming AMA with Element Wallet on August 19th could be pivotal for CORE and SCORE. AMAs provide real-time updates, directly from the team, fostering transparency and trust in the community. They often lead to increased trading activity based on new features or strategic updates. This interaction can trigger price movements due to heightened investor interest and confidence. Check out the source for more details.

Siacoin’s Community Call on September 9th will cover the latest updates and future plans. These calls can influence SC’s price by spreading new information, fueling speculation, and clarifying future directions. Investors value transparent communication, and news from such events can lead to price swings, especially if they include technological or partnership announcements. For more information, see the source.

Oraichain's first in-person community meetup celebrates their $3M Ecosystem Growth Fund. This event could boost ORAI's price since it's not just a social gathering; it's a move to attract AI and Web3 developers. The fund's launch signals strong growth potential, and networking can lead to business opportunities and partnerships. High community engagement usually shows confidence and can positively affect the asset's value. For more details, check out the source.