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Bitcoin, Ether fall as EU considers crackdown on energy-intensive crypto mining

Bitcoin and Ether both fell in Wednesday morning trading in Asia amid news the European Union is considering a bill to restrict the mining of energy-intensive cryptocurrencies, such as Bitcoin. Most of the rest of the cryptocurrency top 10 by market capitalization, excluding stablecoins, also declined, with the exception of Polygon.

See related article: Bitcoin, proof-of-work ban removed from European Union’s MiCA

Fast facts

Bitcoin dropped 1.1% in the past 24 hours to trade at US$19,345 as of 8 a.m. in Hong Kong, while Ether fell 1.6%% to US$1,311, according to data from CoinMarketCap.

The EU measure would grade cryptocurrencies by energy consumption to encourage the use of less power-hungry blockchain systems, such as proof-of-stake, the system that Ethereum now uses post Merge, according to a report by Bloomberg. The grading system, aimed at curtailing global warming, could potentially reduce demand for Bitcoin, the world’s largest cryptocurrency, which relies on the energy-intensive blockchain system known as proof-of-work.

The EU had considered passing legislation earlier this year that would have banned cryptocurrencies that rely on proof-of-work entirely as part of the Markets in Crypto Assets legislation, however, it removed language relating to the ban from the bill at the last minute. The energy-use of cryptocurrencies is contentious, with digital-asset investment house CoinShares releasing a report in January that said Bitcoin mining accounted for less than 0.08% of global CO2e emissions.

Polygon was the only top ten token to gain ground, rising 2.1% to US$0.86, following the announcement Tuesday that the network is now hosting 53,000 decentralized apps, eight times what it had at the start of the year.

U.S equities finished up on Tuesday. The Dow Jones Industrial Average and the S&P 500 Index both closed 1.1% higher, while the Nasdaq Composite Index gained 0.9%.

These gains follow better-than-expected third-quarter earnings from banking giant Goldman Sachs Group Inc. of US$3.1 billion — down from US$5.4 billion a year before but above the expected…

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