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Cryptocurrencies: Quebec lifts energy prices as demand from miners surges

Summary:

  • Quebec authorities temporarily lifted energy prices to counter demand from miners

  • Bitcoin (BITCOIN on xStation5) rebounds from its lowest levels since mid-November 2017

  • US Secret Service urges politicians to regulate privacy coins

The last two months have been far from good for the cryptocurrency market. The capitalization of the whole market shrinked by over $200 billion since the beginning of May to sit just a notch above the $250 billion at press time. Moreover, the Bloomberg Galaxy Crypto Index has exceed its drop to the 41% since its inception on May 3. However, the past hours have been fairly positive for the digital asset prices as most of the major coins accounted quite a noticeable gains. Despite the banking ban going live as soon as next week the Indian cryptocurrency exchanges does not seem to be bothered too much.

The Reserve Bank of India has ordered domestic financial institutions to stop servicing the cryptocurrency exchanges starting from July 5. Most of the country’s exchanges announced that they are most likely to continue providing trading services to its customers but the spectrum of services may be limited. Most of the digital asset bourses announced that they will switch to offering only crypto-to-crypto transactions. Moreover, some of the entities warned that once the ban goes live deposits and withdrawals in INR may be limited or even halted. However, some of the country’s exchanges like Zebpay announced that it will not halt its fiat-to-crypto trading once the ban goes live but it cannot ensure that such measures will not be taken in the future in case the consequences of the bank account shutdown turn out to be more severe than the exchange has initially thought.

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Trading in a stable downtrend BITCOIN briefly slumped to the $5750 handle over the weekend, the lowest level since mid-November 2017. However, the price managed to climb back above the $6000 mark and is now trading in the vicinity of $6150. In case the upward movement continues a reaction to the 33-period moving average may be decisive. Source: xStation5

One of the US Secret Service officials, Robert Novy, has been testifying to the House of Representatives Financial Services Subcommittee on Terrorism and Illicit Finance in the previous week. Not surprisingly Novy claimed that his agency is concerned about the use of cryptocurrencies in crime and money laundering schemes. He pointed that the so-called privacy coins, the ones that offer the highest degree of anonymity, are one of the preferred means of payment criminals use to conclude the transnational transactions like for example drug trafficking. During the hearing Robert Novy urged the politicians to work towards implementing a regulation that will curb the use of the privacy coins. Among such coins one can find Monero, Dash or Zcash therefore in case such regulation is drawn and passed one may expect an increased downward pressure on those markets.

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DASH, just like other major coins, has seen some weakness over the weekend. Do notice that the coin has painted a pin bar pattern in the area of previous swing level at $237.50. In case this pattern is played in a textbook manner a test of the resistance area ranging from $270 to $280 may be on cards. Source: xStation5

Quebec, an eastern Canadian province, tried to lure cryptocurrency miners in order to benefit from its energy surplus generated by the hydro plants as well as cold winters that make mining operations less energy consuming. However, it looks like the region’s authorities did not know what they are asking for. The demand for Quebec’s electricity from the crypto mining industry has been so big that the authorities decided to temporarily lift electricity prices for miners threefold (from $0.05/KWh to $0.15/KWh). The price hike will not affect the existing operations that are said to consume up to 120 megawatts. The regulators explained that the temporary price hike will last until region’s authorities figure out how to deal with an increased demand on electricity. Among proposals there are auctions that would enable companies to bid for energy resources with bids starting from $0.06/KWh as well as imposing a tariff on the mining operations.

 

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