While the Bitcoin network has consistently expanded over the years, its mining industry stands out for its minimal carbon footprint, a feat few industries can boast about. According to Bloomberg crypto market analyst Jamie Coutts, this achievement could become a compelling factor driving Bitcoin’s next wave of institutional investment.
On September 20, Coutts highlighted data indicating that Bitcoin’s use of sustainable energy sources has steadily increased since 2021, accounting for over 50% of its energy mix. This shift has resulted in a deceleration of emissions growth relative to the network’s continuous expansion.
Coutts stated, “Bitcoin as a global monetary network is scaling while its carbon impact declines. Few industries can claim this achievement.” The evolving relationship between Bitcoin’s growth and the global shift away from fossil fuels could spark a surge of institutional and even sovereign investment capital into cryptocurrency.
One significant factor contributing to this trend is the high energy cost of Bitcoin mining, accounting for over 50% of its operational expenses. Miners are incentivized to seek the most cost-effective energy sources, which, in turn, boosts the network’s hash rate while reducing the industry’s emissions or carbon intensity.
Carbon intensity measures the cleanliness of electricity used, while energy emissions refer to greenhouse gases and pollutants released during energy generation. This focus on sustainability is reshaping the industry.
However, the exact percentage of sustainable energy used in Bitcoin mining remains to be determined. Cambridge University’s model, last updated in January 2022, suggested that only 37.6% of Bitcoin mining relied on sustainable energy sources. However, climate technology venture investor Daniel Batten argues that this figure is above 50%.
Batten explains that Cambridge’s calculations omit off-grid mining and methane mitigation, thus underestimating sustainable energy use. Earlier this year, he reported that Bitcoin mining emissions had reached their lowest-ever levels.
Moreover, Batten predicts that the Bitcoin network will achieve carbon neutrality by December 2024. He anticipates that by 2030, the Bitcoin network will mitigate ten times more emissions than it produces, an astounding achievement that could further solidify Bitcoin’s role as a sustainable and responsible player in the global energy landscape.
As Bitcoin mining continues to embrace sustainability, it reduces its environmental impact. It becomes an increasingly attractive investment option for environmentally conscious institutions, potentially reshaping the financial industry’s approach to cryptocurrencies.