84% of Americans don’t believe that Bitcoin investments are a threat to the environment – Forbes Advisor

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Cryptocurrencies have become an increasingly popular investment asset in the United States over the past decade.

At the same time, U.S. investors have begun to prioritize environmental, social, and government (ESG) strategies to limit their exposure to assets that could harm the environment.

A new Forbes Advisor survey found that despite the interest expressed in ESG investments, many Americans familiar with cryptography do not understand its potentially negative environmental consequences, especially Bitcoin (BTC).

According to the Cambridge Center for Alternative Finance, Bitcoin currently consumes electricity at an annualized rate of 127 terawatt-hours (TWh). That exceeds all of Norway’s annual electricity consumption.

Here’s a closer look at how Americans view investing in cryptocurrency and its impact on the environment.

Americans do not understand the environmental impact of Bitcoin

We asked a panel of 2,000 Americans familiar with cryptocurrency what impact Bitcoin has on the environment and climate change. A total of 58% said it had no environmental impact or slight impact.

  • Approximately 32% say they believe Bitcoin has no impact on the environment.
  • Another 26% responded that they think BTC is “good for the environment”.
  • Only 6% say Bitcoin is a major environmental threat.

But here’s the problem. Bitcoin consumes a huge amount of electricity, so it is a major source of carbon emissions.

U.S. Bitcoin miners generated 0.85 pounds of carbon dioxide per kilowatt-hour of energy used in 2020. Bitcoin mining is estimated to produce 40 billion tons of carbon dioxide and the U.S. UU. they account for more than 37% of the world’s total Bitcoin mining capacity.

An estimate suggests that every Bitcoin purchase or sale transaction generates half a tonne of CO2.

To make matters worse, the carbon emissions needed to extract a Bitcoin double approximately every four years, each time Bitcoin completes a “halving”, which halves the rewards issued for undermining the cryptocurrency.

Joe Sweeney, managing partner of Cornerstone Wealth, says Bitcoin is a problem for any investor concerned about ESG principles.

“With so much focus on ESG investment, Bitcoin mining has never been good in terms of energy consumption. Of course, it’s worse today given the supply constraints due to the war between Russia and Ukraine,” says Sweeney.

Most Americans want environmentally friendly investments

Our survey found that Americans could rethink their investments in Bitcoin if they fully understood its huge carbon footprint.

When asked if they would consider investing elsewhere if they found that a cryptocurrency had a significant negative impact on the environment, 65% of investors said yes.

Unfortunately, young Americans seem to be the least informed about Bitcoin’s carbon footprint:

  • 67% of respondents aged 18 to 25 —Gen. Z— and 71% of 26- to 41-year-old investors — Generation Y — say they would consider alternatives to environmentally damaging cryptocurrencies.
  • 41% of respondents aged 18 to 25 believe that Bitcoin has no impact on the environment, while 18% said that BTC is good for the environment.
  • 35% of respondents between the ages of 26 and 41 say they believe Bitcoin has no impact on the environment and 26% say BTC is good for the environment.
  • Half of respondents aged 77 or over, the Silent Generation, believe that Bitcoin has no impact on the environment, and 18% say it is good for the environment.

The survey also finds that Americans are serious about their ESG priorities in relation to actions.

Approximately 58% of respondents who own some form of investment assets say they would avoid actions because of their environmental impact, including 68% of Generation Z and 63% of Generation Y investments.

During the first 11 months of 2021, ESG-focused funds recorded a record $ 649 billion in revenue, more than double the $ 285 billion in ESG fund revenue over the same period in 2019.

Armando Senra, head of BlackRock’s iShares Americas, recently projected that global ESG investment could reach $ 1 trillion by 2030.

But U.S. investors don’t seem to be bundling cryptocurrencies with big energy stocks like ExxonMobil (XOM) and Chevron Corp. (CLC) or highly fossil fuel-dependent car manufacturers such as Ford Motor Co. (F) and General Motors (GM).

Owen Murray, chief investment officer of Horizon Wealth Advisors, says the high degree of speculation in the cryptocurrency market suggests that many American cryptocurrency owners are not thinking too much about the impact of Bitcoin on the world.

“My impression is that most crypto investors don’t really know or don’t care about the environmental impact,” Murray says.

Our survey also found that 44% of respondents were more concerned about the potential return on a cryptocurrency investment than its environmental impact.

  • Nearly 58% of respondents aged 58 to 76 – Baby Boomers – said that the potential return on investment was the most important factor in deciding whether to invest in a particular cryptocurrency, and only 5% of this cohort cited the environmental impact. of cryptography as a concern.
  • The cost and potential return on investment were the main concerns among Generation Z respondents between the ages of 18 and 25, with only 11% citing environmental concerns.

Solutions to the Bitcoin energy problem

One possible solution to Bitcoin’s energy problem is to extract cryptocurrency using renewable energy. But cryptocurrency mining has increased its carbon footprint since China’s crackdown on cryptocurrency mining last year, with miners fleeing the United States and Kazakhstan.

Forced out of China, where hydropower abounds, the percentage of global energy used to extract Bitcoin from renewable sources has dropped from 40% in 2020 to about 25% in August 2021.

In addition, with the ban on cryptographic mining in Beijing, miners have taken their work underground. According to a May report released by the Cambridge Center for Alternative Finance, the country still accounts for more than 21% of the Bitcoin mining market despite China’s ban. The United States maintains its No. 1 position as the largest mining center.

“The fact that cryptocurrencies are created by torturing computers with useless work to extract coins is just another proof of the absurdity of the whole cryptocurrency complex,” says Murray.

But some cryptographic solutions are lurking.

Bitcoin’s biggest rival, Ethereum, is currently implementing a solution to its energy problem by switching to a consensus participation testing mechanism from a working test method.

Ethereum estimates that its energy use will decrease by 99.95% once it closes “the final chapter of the Ethereum job test,” which is expected to be completed later this summer, likely in August.

Survey methodology

This online survey of 2,000 American adults was commissioned by Forbes Advisor and conducted by market research firm OnePoll, in accordance with the Market Research Society’s code of conduct. Data were collected between May 13 and 17, 2022. The margin of error is +/- 2.2 points with 95% confidence.

This survey was overseen by the OnePoll research team, a member of the MRS with corporate membership of the American Association for Public Opinion Research (AAPOR). For a complete survey methodology, including geographic and demographic sample sizes, please contact pr@forbesadvisor.com.

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