In the wake of the 2021-2022 global energy crisis, Bitcoin, Ethereum, and other popular cryptocurrencies began a steady descent from all-time highs in price. Nowhere is the energy crisis more acute than in Europe, causing investors to question how it affects crypto businesses. Discover how the most recent energy supply troubles have impacted European crypto companies below.
Crypto Businesses Adapt to the Energy Crisis
Adaptation remains the key to a successful business even in the most accommodating markets. The ongoing oil and natural gas supply chain issues have merely placed a spotlight on European crypto companies to see which ones possess the flexibility and innovation to survive.
Based in the British Overseas Territory of the Cayman Islands, Binance has entered discussions with the Nigerian Export Processing Zones Authority to create a virtual free zone. Both parties hope to encourage growth and promote regulatory compliance on the part of Nigeria’s crypto businesses.
Bitcoin Brabant, a Dutch crypto company, has responded to the energy crisis by installing their Bitcoin mining equipment in warehouses and greenhouses to maintain temperatures during the winter. Even more impressive, the mining rigs run on solar power.
The UK’s Rowan Energy has created a low-carbon blockchain based on solar energy. The company has been around since 2018, but the international rollout of the SmartMeter should commence in 2023. The timing could not be better.
Crypto Companies Discover Who Their Real Customers Are
One of the silver linings to the most recent crypto crash involves consolidation. The drop in crypto prices shook out a lot of weak hands. Investors who once claimed they would hodl for life suddenly sold their coins for a loss.
As Bloomberg rightly pointed out, the 2022 crypto crash weeded out tourists, permitting crypto companies to see who their real customers are. Most of the individual speculators and insufficiently capitalized client businesses were flushed out of the market. What remains has held steady for months now.
Crypto Businesses Close Down, Creating Space for Startups and Growth
Not a single crypto company was spared during the massive 2022 downturn. Coinbase, although not a European company, found itself forced to lay off over 1,000 employees. Other crypto ventures weren’t so lucky — Many shuttered permanently.
Several prominent crypto companies went belly-up in 2022. Some of the most well-known European crypto businesses that suffered the most due to the crypto crash include:
- Nuri (Germany)
- Coingate (Lithuania)
- 2gether (Spain)
- We.trade (Ireland)
Bankruptcies in Europe’s crypto sector create opportunities for new startups and well-positioned crypto companies to fill the vacuum. Several of the survivors have begun translating documents into German, Lithuanian, Spanish, and English in attempts to find new market footholds.
In the minds of consumers, the European crypto companies that survived the 2022 energy crisis enjoy more credibility going forward.
Crypto Energy Crisis FAQ
At Coinfomania, we have received an increasing number of questions regarding the relationship between the energy market and cryptocurrencies. Find answers to some of the most frequently asked crypto energy crisis questions below.
How Much Energy Does Cryptocurrency Waste?
Cryptocurrency wastes an unknown amount of energy due to inefficiencies in the mining process. However, in some cases, the mining of cryptocurrency saves energy that would otherwise be wasted by power plants and natural geological phenomena, like volcanoes and geothermal fissures.
The creation of Bitcoin requires about 1,500 kWh or 50 days of power for an average US home.
Why Is Cryptocurrency So Energy Intensive?
Cryptocurrency is so energy intensive because of the processing required to maintain the blockchain. Bitcoin and other cryptocurrencies that implement a proof of work consensus mechanism force miners to perform complex calculations, which necessitates considerable processing power and electricity. The White House recently released a report about lowering Bitcoin’s energy use.
Which Cryptocurrency Is Energy-Efficient?
IMPT is the most energy-efficient cryptocurrency. You can convert your IMPT tokens into carbon credits and mint the carbon credits into NFTs. You can then list your carbon credit NFTs on the IMPT marketplace or consume them to offset your carbon footprint.
Will Crypto Recover?
Cryptos will recover eventually. The question is, “When?” or “How much?” You might also want to ask, “Which cryptos?” The fact that cryptos have remained relatively stable for several months after the crash is a good omen. Cryptos seem to have established a solid foundation for future upward moves.
Will Crypto Go Back Up in 2023?
Cryptos will go back up in 2023, but probably not to all-time highs. If you bought at the peak and are waiting to break even, you may need to wait more than two years. Still, on the whole, cryptos should go up in 2023, with plenty of price decreases along the way for traders to make money.
