On September 17th, JPMorgan analysts released a report stating that "as Bitcoin continues to mainstream, electricity demand will increase. Bitcoin is not the only cryptocurrency that requires a mining process, but it is the largest.

Bitcoin is by far the largest proof-of-work (PoW) protocol. From a fundamental standpoint, we believe that Bitcoin's demand and engagement will increase rather than decrease over the next 10 years; therefore, Bitcoin mining will become increasingly competitive, followed by a higher demand for electricity as miners essentially work harder for the reward. Furthermore, Bitcoin's supply is fixed (21 million coins), further intensifying the competition among miners as they approach the maximum mining opportunity (all Bitcoins have been mined and are in circulation). Finally, we believe that the normalization of asset allocation to Bitcoin and the widespread participation of US spot Bitcoin ETFs will drive most of the incremental demand in the near term.

Similar to our point 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, and natural gas can easily serve them. Similarly, we believe that natural gas is a reasonable source of electricity supply for Bitcoin mining equipment (i.e., computers) that prioritizes uptime, given the advantages of natural gas, including its relatively better environmental impact, lower price, and higher reliability.

Take Texas, for example, which is one of the most popular states for large-scale Bitcoin mining in the United States. Based on data from Texas, natural gas is the state's primary energy source, accounting for approximately 43% of all energy consumption in 2022. We believe these data complement our view that natural gas is a natural choice for electricity supply for Bitcoin miners."