Bloomberg Analyst: Bitcoin Achieving a Rare Feat with Decreasing Carbon Emissions
Bloomberg Intelligence’s crypto market analyst, Jamie Coutts, points out that Bitcoin is accomplishing something remarkable that is often overlooked. According to Coutts, as Bitcoin adoption continues to rise, the network’s carbon emissions are actually decreasing, which is a rare phenomenon.
Coutts attributes the reduction in carbon footprint to Bitcoin miners shifting towards renewable energy sources to cut costs. As more than 50% of mining expenses come from energy consumption, miners have a strong incentive to seek out cheaper and greener energy options. This shift has led to an increase in the network’s hash rate while simultaneously reducing the industry’s carbon emissions.
Coutts highlights that over 50% of the total energy used for Bitcoin mining now comes from sustainable sources. This percentage has been steadily rising since Bitcoin’s inception but received a significant boost when China banned mining in May 2021, shutting down several fossil fuel-powered operations. The increased use of renewable energy has not only reduced Bitcoin’s carbon intensity but also further decentralized the mining industry.
Additionally, Coutts examines the decline in carbon emissions per dollar of market cap. Despite Bitcoin’s price being 60% below its all-time high, its network value has increased by 335% since 2019. In absolute terms, emissions from Bitcoin mining have remained relatively flat, with a slight increase of 6.1%. However, when considering emissions per dollar of market cap, they have plummeted by 75%.
Hot Take: Bitcoin’s Green Revolution
Bitcoin’s ability to scale while reducing carbon emissions is a significant achievement that sets it apart from many other industries. The increasing adoption of renewable energy by miners has played a crucial role in this feat. Not only has it lowered the carbon intensity of Bitcoin mining, but it has also helped decentralize the industry and improve its sustainability. As Bitcoin continues to evolve, it remains important to prioritize environmentally friendly practices to ensure a greener future for the cryptocurrency.
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