As Crypto Appeal Widens, Expect Greener Infrastructure
The crypto world has been buzzing since the launch of the first U.S. bitcoin futures ETF, the Proshares Bitcoin Strategy ETF (BITO). The price of bitcoin is on a torrid run, up over $60,000 — a far cry from the July low of $35,080.56 and its humble $0.05 July 2010 nadir. Other crypto assets are likely to be pulled along by bitcoin’s surge, but great success is likely to kick up additional scrutiny on known industry-wide issues.
“If you are mining crypto, you care about the cost of electricity and you don’t have the luxury to care about the climate so much,” said economist Alex de Vries in an interview with The Wall Street Journal. de Vries created the Bitcoin Energy Consumption Index, which tracks the amount of electricity and electric waste from bitcoin production.
However, there are companies that are working on the issue. Canadian mining company Hut8 is one of the over 150 companies that signed the Crypto Climate Accord. With China’s ban on crypto mining, the U.S. and Canada currently house 45% of the world’s miners, up from 12% in January. Companies like Hut8 have made environmental issues a focus as the industry becomes more mainstream in North America.
On their webpage, Hut8 says “Our mining centers mine efficiently and in an environmentally conscious manner through an abundance of gas, wind and green energy. We have industry leading power purchase agreements, which provide us with freezing cold temperatures and high winds. We also maintain a strong working relationship with both community and government localities.”
Like every other investment product, the crypto industry as a whole is contending with the challenges of paving a green future. There are challenges here, but also opportunities for companies to innovate and grow. The VanEck Vectors Digital Transformation ETF (DAPP) provides exposure to companies that operate in the digital infrastructure space. It includes miners such as Hut8, which has 4.93% of its weight, and other industry leaders such as Coinbase, which has recently indicated that it will focus on environmental issues and is set to make a number of announcements on that front in the coming weeks.
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