With bitcoin prices rallying anew, shares of companies that mine the largest digital currency are participating. For example, the CoinShares Valkyrie Bitcoin Miners ETF (WGMI ) is higher by nearly 13% for the week ending April 23. An impressive run to be sure. And it’s one that might have many investors focusing on nothing more than near-term upside potential. However, market participants willing to stick with crypto miners and ETFs like WGMI over extended holdings periods have more to consider. And that includes the industry’s embrace of renewable energy.
It’s an an oft-discussed topic and a relevant one because the industry has been widely criticized for being fossil fuels-dependent. That’s changing, and those alterations could prove impactful while alleviating public relations pressure on WGMI components. Data confirms things are headed in the right direction. As Altcoin Buzz reports, coal powered 63% of crypto mining in 2011, but that percentage plunged to 20% at the end of last year.
Crypto Miners Increasingly Going Green
A new report courtesy of the MiCA Crypto Alliance confirms the encouraging trajectory of the crypto mining industry’s increased reliance on renewable energy.
“By 2030, the Bitcoin network is projected to be at least 70% powered by sustainable energy sources,” according to the report. “Carbon emissions may still increase in absolute terms for a few more years if bitcoin goes through very bullish price scenarios before stabilizing and finally falling.”
That progress is noteworthy because as crypto experts know, the proof of work system through which bitcoin is mined requires a massive amount of computing power. Thus, its energy needs are large and that’s led to criticism of both blockchain and bitcoin mining energy consumption. Additionally, it must be acknowledged that proof of work incentivizes miners. And that includes WGMI holdings, to reduce energy costs, meaning there’s plenty of motivation in the industry to go green.
Those critiques could gradually decrease as the industry increases its use of clean energy. That’s getting easier to do because sources such as wind and solar are more accessible than ever before. And they’re increasingly economical. That wasn’t the case in the early days of crypto.
“Global renewable energy capacity has grown, with significant contributions from countries investing in large-scale renewable energy projects,” noted MiCA. “This growth has been accompanied by a reduction in the cost of renewable energy technologies, making them more accessible and economically viable.”
Price and policy also matter. MiCA’s research uses a $250,000 price for bitcoin in 2030. It also uses three policy scenarios of carbon emissions of 78.2 million tonnes, 56.7 million tonnes, and 35.6 million tonnes. Those imply the mining industry would rely on renewables for 59.28% to 74.29% of power consumption.
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