When it comes to cryptocurrency markets, investors are often focusing on technical analysis, market capitalizations, or coin prices, all of which are relevant data for the sector. However, it is easy to forget an essential aspect of cryptocurrency – the fact that it has to be mined. Bitcoin mining involves verifying and adding transactions to the public ledger, which allows Bitcoin to be more transparent than traditional “fiat” currencies.
In a recent interview, Tom Lee, head of Fundstrat Global Advisors, pointed out that the $6000 price level for Bitcoin was especially important because it was a breakeven point for miners.
Specifically, he stated that “The $6000 level is a level that is more important than we realized…the fact that it’s holding here is actually very good news”.
He went on to point out that other catalysts indicated that bitcoin would end the year strong.
Bitcoin mining also apparently has caught the attention of the White House, as well. It is no secret that Bitmain now mines over half of the world’s bitcoin, and the company is on track to do well over $10 billion in revenue and plans to list on the Hong Kong Exchange soon, as well. In a recent interview with Breaker Mag, the chief market strategist of Ripple, Cory Johnson, pointed out that the U.S. government was concerned about the fact that China was mining the majority of Bitcoin and Ether in the world, as well. The fact that Ripple doesn’t require mining is certainly an advantage that the U.S. government seems to want to explore further.
This shouldn’t come as much of a surprise, considering the fact that the superpowers have been locked in an intense trade war for months now, with sustained losses on both countries’ financial markets. While many financial experts originally suspected that it would be resolved quickly, others suggest that this could be the beginning of a new “cold war” of sorts on the trade front. The fact that China plays such a dominant role in cryptocurrency mining might not have a direct effect on trade, but it could theoretically add tension to any future trade discussions.