ChainCatcher news, JPMorgan analysts released a report saying, "As Bitcoin continues to become mainstream, electricity demand will increase. Bitcoin is not the only cryptocurrency that requires a mining process, but it is the largest.
Bitcoin is the largest proof-of-work (PoW) protocol to date. From a fundamentals perspective, we believe that demand and participation in Bitcoin will increase rather than decrease over the next 10 years; therefore, Bitcoin mining will become increasingly competitive, with a subsequent higher demand for electricity as miners essentially work harder to earn rewards. Additionally, Bitcoin supply is fixed (21 million), further increasing competition among miners as maximum mining opportunity is approached (all Bitcoins have been mined and are in circulation). Finally, we believe that normalization of asset allocations toward Bitcoin and broad participation in US spot Bitcoin ETFs will drive most of the incremental demand in the near term.
Similar to the view we raised above, we believe natural gas is a reasonable source of electricity for miners to meet this incremental energy consumption. Many miners are directly connected to the grid, which can be easily served by natural gas. Similarly, due to natural gas's relatively good environmental impact, lower price, and high reliability, we believe natural gas is a reasonable source of electricity supply for Bitcoin mining equipment (i.e. computers) that prioritizes continuous uptime.
Taking Texas as an example, as it is one of the most popular states in the U.S. for large-scale Bitcoin mining, according to Texas data, natural gas is the state’s primary energy source, accounting for approximately 43% of all energy consumption in 2022. We believe this data is complementary to our view that natural gas is the natural choice for Bitcoin miners’ electricity supply.”
