In the midst of debates surrounding the potential ban on Bitcoin mining in Paraguay, one Senator has expressed support for the industry, referring to it as a “blessing” for the economy.
Bitcoin mining, a passive method of earning BTC, has become increasingly profitable following the recent halving event.
Bitcoin mining remains a contentious issue for many governments worldwide. While some recognize its potential for economic growth, others have raised concerns about its environmental impact. Paraguay is one of the countries grappling with the decision of whether to ban mining or continue to foster its growth.
Central to the debate is the question of how Paraguay can effectively utilize its excess electricity. Currently, the surplus electricity generated by the Itaipu dam is sold to Brazil. However, the growth of Bitcoin mining could potentially lead to higher prices. Senator Salyn Buzarquis has offered a different perspective, advocating for the expansion of the mining industry as a means to boost the economy.
The Senator reveals that the Department of Commerce is currently studying the economic benefits of selling the country’s surplus energy to the crypto mining industry. Buzarquis suggests that crypto mining companies could provide a short- or medium-term solution for selling the excess energy at market prices, which would generate higher returns compared to selling to Brazil. While Brazil currently purchases the excess energy at $10 per megawatt hour, miners are willing to pay between $40 and $51 per megawatt hour.
Coordinating his arguments with ANDE, Paraguay’s national energy administration responsible for distributing electricity from the dam, Buzarquis highlights that the mining industry generates $100 million in annual revenue. Additionally, the industry supports local businesses, such as cable manufacturers, transformer producers, and refrigeration companies.
The Senator expects this revenue to continue growing, projecting $125 million in 2025, with $73 million going to ANDE. He emphasizes that this income will prevent bankruptcy and contribute to the development of the electricity infrastructure, stating:
“This revenue is what ANDE needs to avoid bankruptcy and invest more in infrastructure without increasing electricity prices for the people of Paraguay.”
It is worth noting that the Bitcoin network recently completed its fourth Bitcoin mining event, resulting in a reduction of the BTC reward 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 driving out smaller miners.
With an anticipated supply shock and increasing demand, BTC prices typically rise. This could be a significant opportunity for Paraguay and its mining ambitions. Experts predict that the coming months could see BTC reach a new all-time high, with price projections ranging between $100,000 and $250,000.
As of the time of writing, BTC is trading at $64,370, following a 1% increase in the last 24 hours. This recovery has allowed the world’s largest cryptocurrency to regain some of its weekly losses and regain bullish momentum. While technical indicators suggest a positive outlook, investors remain cautiously optimistic about the future.