Pakistan Turns to Bitcoin Mining: A Bold Move to Boost Economy & Investments

Pakistan: A Shift Towards Bitcoin Mining

Pakistan, a country previously critical of blockchain technologies, is now exploring the potential of Bitcoin mining. During the inaugural session of the newly established "Crypto Council" on March 21, CEO Bilal Bin Saqib proposed utilizing the country's surplus energy for Bitcoin mining. This initiative aims to attract foreign direct investments and position Pakistan as a hub for the crypto sector, following the example of the United States.

The meeting was attended by key figures, including legislators, the governor of the central bank, the chairman of the Securities and Exchange Commission of Pakistan (SECP), and the federal minister for information technology. Senator Muhammad Aurangzeb emphasized the importance of this initiative, stating, "This is the beginning of a new digital chapter for our economy. We are determined to build a transparent, future-ready financial ecosystem that attracts investments, empowers our youth, and positions Pakistan as a leader in new technologies."

"This is the beginning of a new digital chapter for our economy. We are determined to build a transparent, future-ready financial ecosystem that attracts investments, empowers our youth, and positions Pakistan as a leader in new technologies." - Senator Muhammad Aurangzeb

This marks a significant departure from the country's previous stance, as former finance minister Aisha Ghaus Pasha had declared in May 2023 that cryptocurrencies would never be legalized in Pakistan. The earlier resistance was largely due to anti-money laundering measures under the Financial Action Task Force (FATF).

Key Takeaways:

Pakistan's Crypto Council proposes Bitcoin mining using surplus energy.
The initiative aims to attract foreign investments and establish Pakistan as a crypto hub.
This represents a major policy shift from the country's earlier anti-crypto stance.

Bitcoin Mining Brings Electricity to Rural Zambia

In Zambia, a partnership between Bitcoin mining company Gridless and the Zengamina hydropower plant has transformed energy access in rural areas. The hydropower plant, located near the Zambezi River, was initially underutilized due to low local demand. By integrating Bitcoin mining operations, the plant has increased its revenue, enabling it to maintain low electricity prices for approximately 15,000 residents.

Before this initiative, many households relied on small solar panels for electricity. Now, stable power allows residents to use modern appliances like refrigerators and televisions. Local businesses, such as a barbershop owned by Damian, have also benefited, with increased income and expanded operations.

Although the mining project will soon relocate as the plant connects to the national grid, its impact remains significant. Gridless plans to replicate this model in other African countries and even establish its own hydropower plants to support both Bitcoin mining and rural electrification.

Key Takeaways:

Bitcoin mining has improved energy access in rural Zambia.
The Zengamina hydropower plant now serves 15,000 residents with affordable electricity.
Gridless aims to expand similar projects across Africa.

Investing in Bitcoin Without Direct Ownership

For those hesitant to invest directly in Bitcoin, there are alternative methods to gain exposure to the cryptocurrency market. According to extraETF, options include Bitcoin-proxy investments, such as companies holding Bitcoin (e.g., MicroStrategy), Bitcoin mining firms (e.g., Riot Platforms), and crypto exchanges (e.g., Coinbase). Another option is the German-based Bitcoin Group SE, which owns the trading platform Bitcoin.de and is heavily influenced by Bitcoin price movements.

Exchange Traded Commodities (ETCs) offer another route, allowing investors to track Bitcoin prices without owning the cryptocurrency. Examples include VanEck Bitcoin ETN, WisdomTree Physical Bitcoin ETN, and 21Shares Bitcoin ETP. These products provide a simpler way to invest in Bitcoin through traditional brokerage accounts.

Key Takeaways:

Bitcoin-proxy investments include companies like MicroStrategy and Riot Platforms.
ETCs such as VanEck Bitcoin ETN allow Bitcoin exposure without direct ownership.
German-based Bitcoin Group SE offers a local investment option tied to Bitcoin.

Riot Platforms: SWOT Analysis and Strategic Shifts

Riot Platforms, a leading Bitcoin mining company in North America, has reported significant growth despite challenges. In Q3 2024, the company achieved a 34.2% year-over-year revenue increase and mined 412 Bitcoin in September 2024, a 28% monthly rise. Riot's operational efficiency has improved, with a gross profit margin of 30.24% and an EBITDA of $304.4 million over the past year.

However, the company faces challenges such as increased operational costs and the impact of Bitcoin halving events. To diversify, Riot is exploring artificial intelligence (AI) and high-performance computing (HPC) opportunities, including a 600 MW capacity project at its Corsicana site. Analysts estimate this initiative could add $6.73 per share to Riot's valuation, representing 52% of its pre-announcement stock price.

Key Takeaways:

Riot Platforms reported a 34.2% revenue increase in Q3 2024.
The company is diversifying into AI and HPC markets with a 600 MW project.
Riot holds over 10,400 BTC, valued at approximately $625 million as of October 2024.

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