Russian President Vladimir Putin said Russia is one of the world’s leading bitcoin mining countries, a position that will be cemented by the passage of a bill on cryptocurrency mining.
According to Odaily Planet Daily, Russian President Vladimir Putin said at the Eastern Economic Forum that Russia has become one of the world leaders in Bitcoin mining. Putin explained that excess energy in regions such as Siberia can be used for mining, but warned that these activities should not hinder the development of the region.
According to a report by Sergey Bezdlov, chairman of the Industrial Mining Association, Russia produced 54,000 bitcoins in 2023, generating more than $550 million in tax revenue for the country. Bezdlov estimated that the influx of new investors due to the recently approved law on cryptocurrency mining will increase this figure. How will this news affect the industry?
The impact of this incident:
ETFs have less impact on the market:
The main relevance of Bitcoin ETFs to the cryptocurrency market is that they provide investors with an opportunity to enter the Bitcoin market through traditional financial instruments, driving an influx of institutional funds. Therefore, the launch or suspension of Bitcoin ETFs will directly affect the demand and price of Bitcoin. If Russia participates heavily in mining activities and global computing power increases, the supply and demand dynamics of Bitcoin may become more stable, thereby reducing the impact of ETFs on market prices.Buffering against the impact of rate cuts:
The Fed's rate cuts usually have a wide impact on the entire financial market, including the cryptocurrency market. Rate cuts usually lead to reduced returns on traditional assets (such as bonds), which drives investors to look for higher-risk assets such as cryptocurrencies. Therefore, rate cuts may drive demand for cryptocurrencies such as Bitcoin. However, the stable output and legal support brought by Russia's large-scale mining may bring some supply growth to Bitcoin, thereby mitigating the impact of rate cuts on price volatility to a certain extent.Utilization of Russian energy resources:
Russia uses its abundant energy resources to stabilize the supply of Bitcoin, which may make Bitcoin mining relatively cheap. In this context, even if the US interest rate cut triggers an increase in investor demand for cryptocurrencies, it may not cause extreme price fluctuations due to the stability and increase in supply.
Overall, the rapid expansion of Bitcoin mining in Russia may bring some stability to the market, thereby reducing the direct impact of ETFs and interest rate cuts on market volatility to a certain extent. However, other dynamics in the global financial market (such as geopolitical risks and market sentiment) will still have an important impact on the cryptocurrency market.
