Mining cryptocurrency is a notoriously energy-intensive endeavor. In recent years, that issue has increasingly popped up on the radars of climate and environmental groups.
It’s not being lost on investors, either. Crypto miners, including those residing in exchange traded funds such as the CoinShares Valkyrie Bitcoin Miners ETF (WGMI ), may do well to speed their embrace of renewable energy.
Some digital currency miners, including some residing in WGMI, have already moved to boost adoption of clean energy sources. That’s a smart move, because the court of public opinion is increasingly scrutinizing the industry’s energy consumption trends.
Going Green Makes Sense for Crypto Miners
In some instances, public pressure comes from isolated groups targeting a particular sector or industry for the sake of opposition. That’s not the case with cryptocurrency mining and its environmental implications, however. Put simply, mining for bitcoin and other digital currencies consumes a lot of energy. When the activity is dependent on fossil fuels, it can have negative effects on surrounding communities.
A recent study by Nature Communications analyzed the 34 largest U.S. crypto mines in 2022 and consumption trends at nearby power plants. It found that, from mid-2022 to mid-2023, those crypto mines consumed more energy than the city of Los Angeles. Additionally, when those operations relied on fossil fuels, their pollution ratios surged.
“We estimated that 1.9 million Americans were exposed to ≥0.1 μg/m3 of additional PM2.5 pollution from Bitcoin mines, often hundreds of miles away from the communities they affected. Americans living in four regions—including New York City and near Houston—were exposed to the highest Bitcoin mine-attributable PM2.5 concentrations (≥0.5 μg/m3) with the greatest health risks,” reported the study.
The study also noted that pollution stemming from crypto mining activities affects some densely populated areas of the Northeast and Southeast. That’s all the more reason for the industry to continue weaning itself off of fossil fuels and broaden renewables adoption.
Interestingly, bitcoin mining can actually be an assist to the clean energy space. WGMI member firm MARA Holdings (MARA) noted this.
“A flexible, scalable way to tackle the challenges facing renewables. Unlike other data centers, Bitcoin mining centers don’t need fiber or grid connectivity. This means mining operations can operate behind the meter with simply a satellite connection. A recent peer-reviewed study posted in Heliyon found that a solar farm utilizing Bitcoin mining achieves ROI twice as fast as one without,” said the miner.
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