ISLAMABAD: In just one week Bitcoin and other leading cryptocurrencies have lost more than $550 billion market capitalization just because of the emergence of a new cold war between the United States and China over mining of cryptocurrencies, especially Bitcoin. This war has also derailed three-month long spike in demand and prices of cryptocurrencies, a development that has put at risk billions of dollars investments in these decentralized digital currencies and a regular source of income for millions of miners globally. At present, more than 100 million people are involved in trading and mining of cryptocurrencies.
Bitcoin alone has lost $357 billion market capitalization in one week. For example, on May 19, 2021, Bitcoin market capitalization has dropped to $757 billion, from $1.1 trillion a week before. Bitcoin’s value a week ago was over $56,000 and on May 19, 2021, it is being traded around $40,000. Thus, it has lost $16,000 value in one week. Meanwhile, Ethereum has also lost more than $60 billion market capitalization and its price has fallen to $2,960 on May 19, 2021, from a record high of $4,440 a few days ago. Same is the position of other leading cryptocurrencies at this time.
About a week ago, the United States’ media and analysts have suddenly straightened guns towards fast-expanding mining of Bitcoin with a view that it would deteriorate global warming problem. Details gathered by The Truth International revealed that the US media and analysts are blaming China and a couple of other countries for using coal-based cheap energy for mining of Bitcoin, a decentralized cryptocurrency. At the outset of this cold war, Elon Musk, CEO of Tesla, the United States leading electric car manufacturer announced on May 14, 2021, that his company has dropped the decision of accepting Bitcoin for selling cars due to global environmental concerns connected to mining of this cryptocurrency. He, however, said his company’s $1.5 billion investment in Bitcoin would remain intact.
This statement of Elon Musk has brought to limelight globally the new cold war between the United States and China over mining of cryptocurrency. Additionally, some US officials have expressed their concern against rapid spike in Bitcoin value. Apart from accusations, some international research reports point out that 80 percent of mining of cryptocurrency is being controlled by China at this time and that is the real matter of concern for Americans who believe that they are losing their hold on Bitcoin mining because they are using expensive energy in comparison with China. United States has more or less 8 percent share in mining of Bitcoin, followed by 6.7 percent share of Russia. Another area of concern for Americans is that China is dominating the supply of technology pertaining to block-chain and mining of cryptocurrency globally. Thus, it seems irritable for Americans to see China as the leading beneficiary of Bitcoin, world’s leading cryptocurrency that originated from the United States in 2009.
In this situation, cryptocurrency investors and miners have adopted wait-and-see policy with anticipation the cold war would end soon, resuming spike in value and mining of cryptocurrencies. Thousands of young Pakistanis are also mining Bitcoin and Ethereum on daily basis. “Our daily mining income has dropped by 50 percent, to 4 dollars only as against 8-10 days a day before the beginning of cold war over Bitcoin mining,” a young miner told The Truth International. Thousands of Pakistani students are involved in mining of Bitcoin and Ethereum, he said. Mining can only be done with desktop computers having powerful graphic card and a stable internet connection, he added. A different between cryptocurrency and digital currency is that cryptocurrency is a decentralized