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⚡El Salvador Mines 474 BTC with Volcanic Energy🌋

Croxroad

16 May 2024 — 4 min read

☕️ GM Dear Plebs!

Here is Crox Road, your daily dose of orange pill that will turn you into a Bitcoin Maxi.

The menu for today:

🇸🇻 Innovative Energy

El Salvador has mined a total of 474 Bitcoin worth $29 million using volcanic geothermal energy since 2021. The Bitcoin was mined with power from the country’s Tecapa volcano, using 300 mining processors. The country has allocated 1.5 megawatts (MW) to cryptocurrency mining out of the 102 MW produced by the state-owned power plant, according to Reuters. In the face of increasing scrutiny over Bitcoin mining’s reliance on electricity and fossil fuels, El Salvador has emerged as a pioneer in renewable energy mining.

In 2021, El Salvador made history by becoming the first country to adopt Bitcoin as legal tender alongside the United States dollar. Since then, the government has implemented several Bitcoin-focused policies, including establishing a geothermal plant to mine BTC. As a result, El Salvador now holds a total of 5,750 BTC worth around $354 million. Despite global organisations such as the World Bank heavily criticising the Central American nation for adopting Bitcoin, President Nayib Bukele has remained committed to his Bitcoin strategy, even announcing that the country would buy one BTC every day during the bear market from 2022 to 2023.

Bitcoin mining and its environmental impact have long been controversial topics. The Ripple-backed Greenpeace, among others, has advocated for transitioning Bitcoin from proof-of-work to proof-of-stake. In the United States, New York Governor Kathy Hochul signed a proof-of-work mining moratorium into law in 2023, making New York the first state to ban such mining activities for two years. Meanwhile, Tesla CEO Elon Musk, after purchasing $1.5 billion worth of Bitcoin, initially planned to accept BTC as a payment method for Tesla cars but reversed his decision due to environmental concerns. Although reports suggest that over 60% of BTC mining now relies on renewable energy sources, Musk has yet to reinstate Bitcoin as a payment option.

🇺🇲 Softer April CPI at 0.3%

The monthly pace of inflation in the U.S. eased slightly in April, according to the government's Consumer Price Index (CPI), rising 0.3% versus 0.4% in March and economist forecasts of 0.4%. The rest of the report also showed small declines that were in line with expectations. On a year-over-year basis, CPI increased by 3.4%, matching estimates and slightly lower than March's 3.5%. Core CPI, which excludes food and energy costs, rose 0.3% in April, as expected, compared to 0.4% in March. Year-over-year, core CPI was up 3.6%, in line with forecasts but down from 3.8% in March.

The price of bitcoin (BTC) jumped more than 1% following the Wednesday morning report, rising to $63,700. With the spot ETF catalyst sidelined due to slowing or reversing inflows, Bitcoin's price had been under pressure amid expectations that interest rates would remain higher for longer. The consistent slide in inflation throughout 2023 had led many, including the U.S. Federal Reserve, to anticipate easier monetary policy in 2024. However, inflation has risen slightly this year, and with the economy continuing to grow, the prospect of imminent central bank rate cuts has diminished. Prior to Wednesday's CPI report, the odds of a summer rate cut by the Fed were low, with traders pricing in just a 50% chance of a move in September, according to the CME FedWatch Tool.

Simultaneously with the inflation numbers, retail sales data for April showed a flat reading versus forecasts for a rise of 0.4% and March's 0.6%. Retail sales excluding autos rose 0.2% in April, matching expectations but down from 0.9% in March. Traditional markets reacted positively to the soft inflation and economic data, with S&P 500 futures rising 0.5% and the 10-year Treasury yield sliding seven basis points to 4.37%. The U.S. dollar index dropped 0.5%, and gold added 0.7%.

🖼️ NFT

NFT stands for non-fungible token, a type of digital collectible that leverages the same underlying blockchain technology as cryptocurrencies. Unlike cryptocurrencies, each NFT is unique and cannot be exchanged on a one-to-one basis, making them ideal for representing ownership of distinct digital assets like art, music, and virtual real estate.