Increasing competition due to increased participation in pools and the use of advanced devices has made Bitcoin mining an intensive process that requires exponential energy consumption, once again raising concerns about its environmental impact.
According to Cambridge Bitcoin Energy Consumption Index (CBECI)Bitcoin’s current energy consumption is estimated to be 121.22TWh, and its annual consumption is estimated to be 231.13TWh.
Due to energy consumption, Bitcoin is a key factor influencing price fluctuations, so professional traders and investors need to understand how to navigate the market according to changes in mining technology, hashrate, climate, power costs, and regulatory frameworks.
In this article, we will delve into the impact of Bitcoin mining on the environment and the charts themselves, and provide the main long-term trading strategies available.
It also details the complex relationship between Bitcoin price and environmental issues.
How does Bitcoin mining energy consumption affect the price?
The energy consumption of Bitcoin mining affects the price of BTC in various ways, mainly related to the environmental impact of the process. Approximately 1.06 million Bitcoins are still being mined out of a total supply of 21 million, and this process is likely to end by 2140. The enormous amount of energy this requires is already a global concern, resulting in changes in regulatory frameworks, investor disengagement and price volatility.
- Energy concerns: Bitcoin’s annual electricity consumption is 231.13 TWh, which is more than the total energy consumption of various developed countries. It is also significantly higher than the consumption of major technology companies such as Google (12 TWh) and Meta (5 TWh). If more miners fail to transition to renewable energy, they will likely turn away from both institutional investors and individual traders.
- Influence of KOLs: Key opinion leaders (KOLs) concerned about environmental issues can also influence Bitcoin’s charts. Elon Musk’s 2021 decision to suspend the use of Bitcoin to purchase Teslas was a major trigger for the bear market due to Tesla’s assets’ dependence on coal and other fossil fuels for energy.
- Price hike: Energy consumption affects prices and vice versa. Bitcoin hit an all-time high of $126,198.07 two weeks ago, which led to increased mining activity due to increased on-chain activity and increased revenue. Historically, BTC’s energy consumption increases in parallel with price spikes. However, the costs associated with increased energy consumption typically reduce profit margins.
Top Bitcoin Trading Strategies on Mining Energy Consumption and Its Environmental Impact
Professional traders are paying close attention to Bitcoin’s impact on the environment due to its impact on the charts. The main strategies that traders can employ when it comes to BTC mining energy include keeping up to date with the regulatory framework, consulting academic research, seeking input from key figures associated with Bitcoin, examining on-chain data, and observing power costs. Let’s take a closer look at the details.
Keep your regulatory framework up to date
As explained in the section above, changes in the regulatory framework will have far-reaching implications for the crypto market. Therefore, professional Bitcoin traders must monitor not only cryptocurrency laws but also environmental laws. US traders can track federal government actions, state-level policies, and federal agency reports.
The Trump administration in the United States is seriously studying Bitcoin’s environmental impact in relation to the government’s motto of making the United States the crypto capital of the world. Proposed mining legislation could shut down mining operations that fail to meet clean energy standards. Agencies such as the Office of Science and Technology Policy (OSTP) and the Environmental Protection Agency (EPA) Climate impact Review current regulations.
Dig deep into academic research
Academic research is an important area that traders often ignore when predicting Bitcoin movements. While many Bitcoin price predictions only scratch the surface of the iceberg, papers drawn from years of academic research by academics can provide deep insight into the Bitcoin market.
Various universities and private organizations are studying Bitcoin’s environmental impact, helping traders understand how to navigate this space with truth and long-term planning. Google Scholar is a great starting point for your academic writing. Here you can find the latest research on Bitcoin and its environmental impact.
Look for signals from key opinion leaders
As I pointed out earlier with the example of Elon Musk, major opinion leaders have the power to move the market with their words. Follow academics who can provide deep insights into Bitcoin’s environmental impact and influence the market as well.
Other notable KOLs besides Elon Musk include Alex de Vries, who tracks Bitcoin’s energy use and e-waste; Kaveh Madani, who led a United Nations-led study that focused on Bitcoin’s broader environmental costs; Cambridge researcher Michel Laux, who developed the Bitcoin electricity consumption index; University of Texas researchers Joshua Rose and George Kamiya. Energy analyst at the International Energy Agency (IEA).
Investigate on-chain data such as hashrate, block reward, and network difficulty
Bitcoin energy consumption is directly related to block reward, hash rate, and network difficulty, so it is important to track these factors to understand the market scenario. The block reward is currently 3.125 BTC per block, but the price increase has increased mining activity. This Proof-of-Work consensus mechanism allows only one miner to earn rewards per block, meaning other participants are literally wasting their energy.
This environmental damage is of great concern and will increase as prices rise, ultimately leading to regulatory action.
The surge in trading activity increases Bitcoin’s total network hash rate, which represents the total computing power used by the network. Higher hashrates lead to higher power consumption, which begins to raise concerns, especially from governments, academics, and environmentalists. Furthermore, measuring network difficulty, i.e. how difficult it is to mine new blocks, can also increase power consumption.
Conclusion: Is mining energy consumption the main factor determining Bitcoin price?
The relationship between Bitcoin and the environment is complex and requires detailed analysis to understand how the correlation affects Bitcoin price movements. Rising prices will increase energy consumption and raise concerns about climate change, while also potentially driving investors away, ultimately leading to a bear market. However, by using renewable energy, miners can make the mining process less impactful on prices. If power consumption is low, the price of Bitcoin will be driven primarily by speculative trading, use cases, adoption trends, and other macroeconomic factors rather than environmental issues.
Finally, the strategies listed above are for educational purposes only and are intended for long-term Bitcoin holders, not day traders.
If you are interested in the relationship between the Bitcoin market and environmental factors, be sure to do your own research to increase your knowledge so that you can build a trading strategy that suits your unique goals. Always Daior!
Also read: Will Bitcoin mining be profitable in 2025?
