In the midst of debates surrounding the potential ban on Bitcoin mining in Paraguay, one Senator has expressed admiration for the industry, describing it as a “blessing” for the economy.
Bitcoin mining is a passive method of earning BTC that has the potential to be highly profitable, especially after the recent halving event. However, it remains a contentious topic for many governments worldwide. While some recognize its potential to drive economic growth, others have concerns about its environmental impact. Paraguay finds itself grappling with the decision of whether to ban mining or continue to foster the industry’s growth.
At the center of the debate lies the question of how Paraguay can effectively utilize its surplus electricity. Currently, the surplus electricity generated by the Itaipu dam is being sold to Brazil. However, the growth of the Bitcoin mining industry could lead to higher prices. Senator Salyn Buzarquis offers a different perspective, advocating for the growth of the mining industry as a means to boost the economy.
The Senator reveals that the Department of Commerce is studying the economic benefits of selling the energy surplus to the crypto mining industry. Buzarquis suggests that crypto mining companies could be a short- or medium-term solution for selling the excess energy at market prices. This would generate higher returns compared to selling to Brazil, where the excess energy is purchased at $10 per megawatt hour. Miners, on the other hand, are willing to pay between $40 and $51 per megawatt hour.
Coordinating with ANDE, the country’s national energy administration responsible for distributing electricity from the dam, the Senator highlights that the mining industry generates $100 million annually. Additionally, the industry supports local businesses such as cable manufacturers, transformer manufacturers, refrigeration companies, and more.
The Senator predicts that revenue from the mining industry will continue to increase, reaching $125 million by 2025, with $73 million benefiting ANDE. This revenue will help prevent bankruptcy and enable investment in electricity infrastructure without increasing electricity prices for Paraguayans.
It’s worth noting that the Bitcoin network recently completed its fourth mining event, which resulted in the BTC reward being halved from 6.25 BTC to 3.125 BTC. Historically, this has led to a restructuring of the mining landscape, favoring larger and more efficient operations while pushing out smaller miners.
With an anticipated supply shock and growing demand, BTC prices typically experience an upward trajectory. This could be advantageous for Paraguay and its mining aspirations. Experts predict that the next few months could see BTC reach a new all-time high, with price projections ranging from $100,000 to $250,000.
At the time of writing, BTC is trading at $64,370, following a 1% increase in the last 24 hours. This has allowed the world’s largest cryptocurrency to recover some of its weekly losses and regain bullish momentum. While technical indicators suggest a bullish outlook, investors remain cautiously optimistic about the coming weeks.