Inflation Crashes Ethereum While Bitcoin Company Helps Texas Through New 2022 Heatwave

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Last Updated on 12 June 2022 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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The CPI (Consumer Price Index) reading of last Friday showed that inflation wasn’t ready to drop just yet even though the Fed had started raising interest rates already. This negatively impacted all major stock indices and most crypto coins, although it was remarkable to see that Ethereum fell much faster than Bitcoin.

Over in Southern USA, they’re getting ready for a serious heatwave. Luckily a Bitcoin mining company is there to help.

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Inflation crashes Ethereum

Rising inflation readings in the US means that households will normally become more prudent with their spending management, especially those with lower incomes who spend a larger portion of their budget on basics, such as food and utility bills, and thus spending little monies on crypto coins will become much more rare.

The higher cost of energy is going to make mining a more expensive, less profitable business.

Jason Schenker, chief economist at Prestige Economics explained.

As for crypto in general, if you see people going into more defensive assets, that’s not something I think would favor crypto as well.

Economists are convinced that these tighter budgets could also limit demand for digital assets. Because Wall Street investors believe in Bitcoin’s long term potential, it is therefore normal to see Ethereum fall faster than Bitcoin, analysts claim, because Vitalik Buterin’s coin is younger and seen as a riskier bet.

On Sunday morning, Ethereum could be seen losing 14% while Bitcoin only fell 6%.

Texas Power Grid

Last year, Bitcoin fell in May when ESG became a worldwide concern for companies. ESG stands for Environmental, Social, and Governance and many claimed that Bitcoin is ruinous for the environment and should therefore not be a favored investment vehicle. Tesla CEO Elon Musk even claimed that he would refrain from investing in Bitcoin further until it had cleaned up it’s ESG stance.

This year though, the Bitcoin industry is actually helping people fight off the effects of climate change. As a report on Fox showed this week, the Texas power grid is now being stabilized thanks to the huge Bitcoin mining investments that have been made in the state in the past year.

100 degrees

You may remember that China decided to ban Bitcoin mining last year, also causing the crypto market to fall, and that many miners have since relocated. In essence, the move of those Bitcoin miners turned Kazachstan into a crypto powerhouse and made sure that Texas became the new centre of the Bitcoin mining world.

Now, as a punishing heatwave is about to be turned loose on the Southern US, Bitcoin is actually helping people in Texas.

With record-setting high temperatures that will top 100 degrees Fahrenheit in several states and daytime temperatures 10 to 20 degrees above normal, many in Texas will turn to their air conditioning machines for help. But, when everyone turns on their device at the same time, the energy grid can easily malfunction, certainly in Texas. Last time the world witnessed this was during the February 2021 cold snap, when everyone turned on their heating at the same time and the power grid was crippled for several days.

In order to help stabilize the grid, the excess capacity of Riot Blockchain’s giant Bitcoin mining capacity will be let loose on the Texas power grid in order to make sure that households get enough energy to turn on their air conditioning.