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Genesis Digital Assets will set up a BTC mining center in Argentina
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Genesis Digital Assets will set up a BTC mining center in Argentina

created Simon peters14 May 2024

Bitcoin failed to capitalize on the momentum from the previous week - the price was unable to reach a "higher high" above the level of $66. However, we have seen a pullback towards the $800 level that has been repeatedly seen since March.

As the neutral rating of the Crypto Fear and Greed Index indicates, there appears to be a slight lull in the cryptocurrency markets. Even with the recent halving of the bitcoin block reward, price volatility in Q2 is far from what we saw at the beginning of the year. However, this week is an important one for macroeconomic data, as the latest US PPI and CPI numbers will be released on Tuesday and Wednesday, respectively. There will also be a speech by the president FED, Jerome Powell.

Data well above or below forecasts, in either case, could provide some near-term volatility. If PPI and CPI data turn out to be lower than forecast, cryptocurrency prices can be expected to rise as markets become slightly more hopeful about faster interest rate cuts.

Genesis Digital Assets will set up a bitcoin mining center in Argentina

Genesis Digital Assets (GDA), one of the world's largest bitcoin mining operations, has partnered with YPF Luz, a subsidiary of Argentine state-owned energy company YPF, to establish a new bitcoin mining facility in the country.

The new facility will support 1200 bitcoin mining machines and will be powered by electricity generated from stranded gas that would otherwise be burned in the atmosphere and wasted.

GDA's entry into Argentina and partnership with state-owned company YPF comes just months after Argentina's late 2023 presidential elections, in which bitcoin-friendly President Javier Milei took office.

“We believe Argentina is an important country for bitcoin mining given its abundance of energy sources and friendly business environment.” – said Abdumalik Mirakhmedov, executive chairman of the GDA.

“The opening of our first data center in South America is an important step in our geographic diversification efforts. This will be another opportunity to show the world that bitcoin mining can have a positive impact on the environment and can be fully integrated into local communities." - we read on in a press release.

For YPF Luz, turning stranded gas into a revenue stream by helping to power bitcoin mining could also help offset costs and promote sustainability.

Metaplanet accepts BTC as a strategic reserve asset of the state treasury

Metaplanet Inc, a company listed on the Tokyo Stock Exchange, she announced on Monday that it had adopted bitcoin as its strategic reserve asset in response to continuing economic pressures in Japan, particularly high levels of public debt and prolonged periods of negative real interest rates. Japan currently has the highest public debt-to-GDP ratio in the developed world, currently standing at 261%.

Additionally, protection against currency depreciation was the cited reason for Metaplanet to switch its treasury strategy to bitcoin. “As the yen continues to weaken, bitcoin offers a non-sovereign store of value that has and may continue to appreciate in value relative to traditional fiat currencies.” The Japanese yen is currently at a 30-year low against the US dollar and at an all-time low against bitcoin.

Metaplanet currently holds 117,7 bitcoin (approximately $7,19 million). While this is a relatively small amount compared to other publicly traded companies such as Microstrategy, Tesla and Block Inc, it is good to see more publicly traded companies have bitcoin on their balance sheets.

Stablecoins on Bitcoin are getting closer

Stablecoins running on Bitcoin are getting closer to implementation thanks to a new protocol (Taproot Assets) created by Bitcoin Layer 2 infrastructure developer Lightning Labs. Speaking at the Financial Times Crypto and Digital Assets Summit in London last week, Lightning Labs CEO Elizabeth Stark said they recently conducted test trades on the Lightning Network with a created asset. Test trades appeared about six months after the developer first appeared announced Taproot Assets.

Stablecoins are a growing area of ​​cryptocurrencies, with the total market capitalization of stablecoins expected to grow into the trillions of dollars in the coming years. With stablecoins (and potentially other financial assets) to be issued on the Bitcoin network and transacted through the Lightning Network, it could enable people to transact globally at much lower rates than traditional networks like Visa and even potentially others offer blockchains.

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About the Author
Simon peters
eToro analyst. A graduate of the Faculty of Mechanical Engineering at Brunel University in London. He is CFA UK Level 4 certified in Investment Management.
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