As a result of the severe heatwave, Bitcoin miners in Texas are turning off their power this week. Texas’ grid operator asked residents to conserve energy as extreme heat drove record-setting power demand in Texas on Monday.

According to the Texas Blockchain Council, Bitcoin mining companies in Texas responded by shutting down their machines. This freed approximately 1% of the grid’s total power.

“They are closing down for many reasons, but primarily because it’s the right thing to have a good ‘grid citizen,” Lee Bratcher, president and CEO of the Texas Blockchain Council, stated to The verge in an e-mail. Bratcher also stated that there are financial motives because spot prices for electricity in Texas soar when there is a shortage.

“It is the right thing”

After China banned this practice, Bitcoin miners have been flocking to Texas in the last year. The US became the largest hub for global mining. According to Bloomberg , those crypto miners will increase Texas’ electricity demand by 6 gigawatts by next year.

In essence, crypto mining companies set up their own data centers with specialized hardware to’mine’ Bitcoin. They race to solve more complicated puzzles. This energy-intensive process allows miners to gain new tokens and validate new transactions on blockchain.

The Bitcoin network uses more electricity annually than the country of Belgium. However, its energy consumption has fallen in the last month, after the price of Bitcoin plunged . It is less profitable to operate mining machines due to the lower cryptocurrency value and high energy prices. Bratcher stated that one of the largest publicly traded miners in Texas will shut down between 8AM-10PM on’several days this weeks’.

Texas’ power grid can be saved by turning off your lights, especially at peak hours. Texas is experiencing triple-digit heat this week, which puts more pressure on the electricity grids. Texas’ heat dome has also deprived it of most of its wind power. Typically, Texas generates around 25% of its electricity. Texas’ power grid is particularly vulnerable as it does not connect to other power grids. In an emergency, other states may be able to share their energy.

Its power grid is not yet out of reach

After the Electric Reliability Council of Texas (or ERCOT) asked Texans to reduce their energy consumption on Monday, the state has avoided large-scale power outages. In February 2021, a severe cold spell caused widespread outages throughout the state. Texas is expected to experience high temperatures throughout the week. The state’s power grid is not yet out of commission.

It isn’t the first instance of Bitcoin miners in the state responding to high-temperature power cuts. Riot Blockchain, a Bitcoin mining firm, has reduced energy consumption by 8,648 megawatt hours during June, Alexis Brock, Riot’s marketing coordinator, said in an email to the Verge.

This is significant as Riot has a Rockdale, Texas facility that it claims to be North America’s largest Bitcoin mining site. When peak demand threatens stability of the grid, the company plans to keep the facility running at a lower level.

KuCoin has not yet confirmed rumors that it is stopping withdrawals from its platform. Rumours circulated that KuCoin would stop withdrawals due to losses from the LUNA crash.

KuCoin Rumors Suspending Withdrawals

Johnny Lyu, KuCoin’s CEO, had Saturday denied claims that he had suspended withdrawals. KuCoin is not exposed to LUNA or 3AC, Lyu stated. Lyu also said that there was no severe injury from any coin crash, referring specifically to the Terra crash. Lyu also stated that there is no plan to stop withdrawals from the platform. He stated that everything on KuCoin works well.

Lyu made a comment about false claims regarding KuCoin’s Bitcoin balance in a recent post. He stated Monday that many of the on-chain tracking tools do not show exact balances.

“Most on-chain trackers tools cannot show the exact balance of exchanges. It’s not their fault that many exchange addresses aren’t labeled. Glassnode previously did not track many KuCoin wallets. They recently updated the BTC labels to KuCoin.

He was responding to a crypto enthusiast, who spoke about the rumors surrounding Kucoin Bitcoin balance. Although it was believed that Kucoin only had 300 Bitcoin, on-chain data revealed that there were more than 16,000 BTC.

KuCoin CEO also stated that the 16,000 Bitcoin data was still understated. He explained that several KuCoin addresses have not been labeled yet, meaning the actual total is not being added up. “The KuCoin BTC balance at the moment is underestimated because there are many KuCoin addresses that have not been labeled.

New Hiring Continues At KuCoin

Many of the crypto exchanges were hit hard by the market crash, and many announced layoffs. KuCoin stated that it was one of few exchanges that continued to hire despite the market volatility.

Nayib Bukele, president of El Salvador has spoken out about bitcoin investments in the midst of heavy BTC sell-off.

El Salvador has bought 2,301 Bitcoins since September 2013, when BTC became legal tender in the country. El Salvador’s Bitcoin investment has lost 50% , or more than $50 million, due to the falling price of bitcoin.

Bukele tweeted Saturday: “I see that some people worry or anxious about bitcoin market prices,”

I advise you to stop looking at the graph, and just enjoy your life. Your investment in BTC is secure and will continue to grow even after the bear market. Patience is key.

Due to the large bitcoin position on El Salvador’s balance sheets, many people are concerned about El Salvador’s fiscal well-being.

Alejandro Zelaya (Swiss finance minister), dismissed concerns last Wednesday, declaring that there is ‘extremely low fiscal risk’. He said that if they inform me that El Salvador is at high fiscal risk due to bitcoin, I will only smile.

Bitcoin dropped to levels not seen since early in 2020, this weekend. BTC trades at $20,141 as of the writing. This is 12% higher than the previous 24 hours and 33% higher than the previous seven days.

Bukeke’s optimism is shared by some, such as the bitcoin bull Michael Saylor or Skybridge Capital founder Anthony Scaramucci.

Others are less optimistic about bitcoin’s future. BTC will fall to $12K, according to Jim Cramer from Mad Money. Doubleline Capital Jeffrey Gundlach stated that he would not be surprised if bitcoin falls to $10K. Rich Dad Poor Dad author Robert Kiyosaki stated that bitcoin could reach a bottom of $9K. Guggenheim CIO Scott minerd stated that bitcoin could plummet to $8K.

Reuters reported that Jane Fraser, CEO of Citigroup, warned Friday about the state of the global economy. Citi is America’s third-largest bank and has the most global focus.

At an investor conference in New York she spoke about the ‘three Rs’ that are affecting global economic growth. She stated: “It’s rates. It’s Russia. And it’s recession.

Fraser stated that Europe’s energy issues are having an effect on many companies in certain industries. Fraser explained that some companies are closing down because of rising electricity prices and energy costs. Citi executive stated:

Europe felt much more likely to enter recession than the U.S.

In order to combat inflation, major central banks have already begun planning interest rate increases and are preparing for the global first round of quantitative tightening. This move will likely reduce credit and increase stress in an already slowing global economy.

Fraser commented on the European Central Bank’s (ECB) actions, saying: “It feels like that the ECB has a few months behind the Fed in getting its arms around the inflation and without quite as much flexibility as the U.S. has.’

Fraser stated that the U.S. is asking more about interest rates and not recession. She noted, however, that the U.S. will have to be able to avoid a recession.

While it is not the base case, it is not impossible to avoid.

Jamie Dimon, CEO of JPMorgan Chase, stated Wednesday that an economic’Hurricane’ was coming to us, and advised investors to be prepared for its impact.

John Waldron , President and Chief Operating Officer at Goldman Sachs, warned about unprecedented economic shocks. He also predicted tougher times ahead.

Elon Musk, Tesla CEO, stated that he has a “very bad feeling” about the economy. This prompted President Joe Biden’s response. Musk stated that we could be in a recession for 12-18 months.

Investments in cryptocurrencies are appealing for many reasons. While cryptocurrencies can be a quick way for some to make money while they sing ‘wen lambo’, others prefer the trust in blockchain technology and a specific project. Some people may think that getting into cryptos is as simple as jumping on the hype train. This is primarily because of FOMO.

All of that aside, cryptocurrencies such as Bitcoin are often called an excellent inflation hedge or a store-of-value. As inflation continues to rise, how do cryptocurrencies and inflation intersect?

What is inflation?

Inflation refers to the process whereby a currency’s declining value, such as the US dollar, causes an increase in the cost of goods and services, which helps the economy grow. Cryptos, however, are not able to be altered in the same way as fiat currencies by changing interest rates.

bitcoin and ether rallied after the announcement of an interest rate hike by FEDs in May. They rose about 3.5% and 1.2% respectively. One factor responsible for large losses in crypto markets has been the soaring inflation. The United States Federal Reserve announced an increase of 0.5% in interest rates. This is the largest hike in interest rates in two decades.

Although cryptocurrencies experienced short-term price increases following the announcement of the interest rise, these price gains were not sustainable. Analysts believe that cryptocurrencies behave in line with equities and are similar to big tech stocks.

Bitcoin – An inflation hedge?

The USD’s purchasing power against BTC continued to fall in the post-pandemic period. It took a substantial dip in March 2020 and then dropped again towards the end 2020. Due to continuous money printing by the government, USD’s value also fell.

Inflation has already decreased the USD’s value by 85% over the past 50 years. This strengthened BTC’s reputation as an excellent alternative for fiat money. After reaching an all-time high at $69,000 in November 2021 bitcoin’s prices began to fall. The USD purchasing power against BTC began to increase around the same time. It increased in November-end 2021, and then again in February 2022.

Notably, USD’s purchasing power against BTC has been on an upward trend for most of the year. This puts at risk bitcoin’s inflation hedge narrative. Investors, particularly newcomers, are also affected by market volatility and the high cost of one BTC unit.

Investment alternatives such as bitcoin mining-backed ETFs or BTC ETPs offer decent exposure for investors of all levels. However, BTC traders, investors, and newcomers to the market are still plagued by the constant volatility.

Inflation and cryptocurrencies

BTC prices have not reacted negatively in the majority of bitcoin’s existence to policy uncertainty shocks. This is partly consistent with Bitcoin’s independence of government authorities. However, despite largely bearish market conditions and a significant role in setting BTC’s price trajectory for the past two quarters, socio-political factors have been a major factor.

BTC’s increasing correlation with the major indices-the S&P 500 & Nasdaq – could play a S&P 500 or Nasdaq role in the coin’s inflation hedge narrative.

Bitcoin’s value fell 57.02% to $69,000, its record high. This also hurt the coin’s ability to be used as a store-of-value. BTC was trading at $29,504.67 as of the writing date, which is close to the $30,000 psychological resistance/support level.

Since May 10, the coin has been in a rangebound trend between $31,500 to $28,380.

It is still unclear whether BTC will outperform fiat currency and traditional assets in the near future, as the market tends to be more bearish. Many analysts believe that the declining ROIs of cryptocurrency and bitcoin markets over the years have led to a maturing market.