Monthly report of May 2023

Monthly report of May 2023

This monthly report reviews the most important cryptocurrency news in May. The report focuses especially on the active use of Bitcoin and Ethereum networks, an analysis of Bitcoin mining conditions in Finland, the advances made by Hong Kong and Beijing, and Tether's decision to accumulate bitcoin in its reserves.

May in the cryptocurrency market

May was a relatively calm month in terms of cryptocurrency price movements. Of the cryptocurrencies offered by Northcrypto, Litecoin and Ethereum stood out positively, as their prices were up just over five and about three percent in May. The price of Bitcoin was down just under five percent, while the prices of Chainlink, Aave, and Polygon fell just over five percent. The price of ApeCoin fell by more than 15 percent.

Bitcoin and Ethereum networks in active use

Bitcoin and Ethereum networks were in exceptionally active use in early May. The high volume resulted in higher transaction fees in both networks, for example, compared to the beginning of the year. However, activity in both networks has been declining since the first half of May, and by the end of the month, both networks had returned closer to the "normal" in terms of both activity and transaction fees.

One major factor behind the high volume of Bitcoin network was the Ordinals NFT protocol, which has grown in popularity in recent months. The operation of the Ordinals protocol is based on the smallest unit of bitcoin, satoshi (1 bitcoin = 100,000,000 satoshi). The Ordinals protocol allows data such as a file or smart contract to be included in satoshi. In turn, adding smart contracts enables NFTs on Bitcoin.

The volume of the Ethereum network was also very high in the beginning of May, for example, compared to the beginning of the year. The high volume of the Ethereum network was significantly influenced by the growing popularity of so-called meme tokens. A good example of this is the Pepe token on top of Ethereum, whose market cap rose to over €1.5 billion at its peak in about three weeks. However, by the end of the month, interest in meme tokens had already subsided and, for example, the market capitalization of Pepe had fallen to approximately €500 million.

Is Finland a good place to mine Bitcoin?

In May, an analysis of the prerequisites for Bitcoin mining in Finland was published. According to the analysis, Finland is becoming an increasingly attractive place for Bitcoin miners due to the growing power generation capacity and the possibility of selling waste heat. In conclusion of the analysis, Bitcoin miners based in Finland have revenue potential from three sources: mining, demand response, and heat sales. When these are combined with the fact that the price of electricity in Finland is likely to decrease in the future, Bitcoin miners operating in Finland become globally very competitive.

Of the three sources mentioned above, demand response is a very current topic in Finland. For example, with the launch of Olkiluoto 3 in the spring, the price of electricity in Finland has sometimes even fallen into negative territory. Such situations are very problematic for Olkiluoto, for example, as nuclear power production cannot easily be interrupted in such situations. Therefore, Olkiluoto would need flexible demand when selling electricity to the market is not profitable. Bitcoin mining is one of the best solutions for demand response, as Bitcoin can be flexibly mined or not mined at virtually any time. This makes it possible to use electricity to mine Bitcoin when the price of electricity is zero or negative, making it possible to receive compensation for the electricity generated.

Hong Kong and Beijing’s advances

SFC, the securities market regulator in China's special administrative region Hong Kong announced in May that retail investors will be able to trade the largest cryptocurrencies by market cap on SFC-licensed trading platforms from the beginning of June. Licensed trading platforms must operate in accordance with a number of investor protection measures. Hong Kong's decision can be seen as a significant step forward for East Asia, as virtually all cryptocurrency transactions have been banned in China since autumn 2021.

There was also positive cryptocurrency news related to the Chinese capital Beijing in May. According to the local news outlet The Paper, Beijing released a white paper on Web3 innovation and development. The documentary talks about Web3 as an inevitable trend for the future development of the Internet. According to the white paper, Beijing aims to strengthen policy support and accelerate technological breakthroughs to promote the web3 industry.

Tether accumulates bitcoin in its reserves

A report on the assets of Tether Holdings Limited (Tether), the company behind the stablecoin Tether (USDT) was released in early May. According to the report, the company has over €2.2 billion in excess funds. For the first time, the report also shows bitcoin holdings, which were valued at just under €1.4 billion at the end of the first quarter, which translates to holdings of just under 53,000 bitcoins.

Shortly after the report was published, Tether also shared its latest investment strategy. According to the investment strategy, Tether plans to invest up to 15 percent of its net profits in bitcoin from now on. According to Tether, this will further strengthen and diversify Tether's reserves. Moreover, according to comments from Tether co-founder and CTO Paolo Ardino, Bitcoin has consistently proven its resilience and emerged as a long-term store of value with substantial growth potential.


The high usage of Bitcoin and Ethereum, especially in early May, is provoking a wide range of reactions. For ordinary people using the Bitcoin and Ethereum network, the increased activity is at least partly negative, as it makes transactions more expensive than normal. For many bitcoin and Ethereum (ether) investors, on the other hand, the increased network activity can be seen as a positive thing, as more active use of the network can also be seen to bring value to bitcoin and ether. Increased transaction costs have also fueled discussion about Bitcoin and Ethereum's scalability solutions, where transaction fees are only a fraction of the transaction fees of the actual network.

The increased production of electricity produced by nuclear power and renewable energy sources in Finland also makes Finland a more attractive destination for Bitcoin miners. Bitcoin mining, on the other hand, can promote the use of renewable energy sources, for example, because in so-called moments of overproduction, excess electricity can be used to mine Bitcoin. Thus, Bitcoin mining has the potential to make, for example, renewable energy production more profitable.

The positive cryptocurrency news from Hong Kong and Beijing in May bodes well for cryptocurrency development in China and Asia more broadly. It is very interesting that Hong Kong's advances and Beijing's white paper on Web3 innovation and development took place in the same month. Can more positive cryptocurrency news be expected from China also in the near future?

The decision by Tether Holdings Limited, the company behind the USDT stablecoin, to accumulate bitcoin in its reserves is a positive signal. It is very possible that a significant number of companies operating in the cryptocurrency market have been, or will be, doing the same, creating a constant and fairly steady demand for bitcoin. This naturally bodes well for future price developments.

Ville Viitaharju Cryptocurrency specialist
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Last updated: 05.06.2023 15:00
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