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The “sustainable bitcoin” paradox

Published

9 months ago

14 May, 2024

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Welcome back. The annual Banking on Climate Chaos report was released today and shows a modest decline in aggregate fossil fuel financing last year by the world’s 60 largest banks, but surprising increases for some of the largest lenders. Read on to find out which ones.

First, let’s take a dive into the world of cryptocurrencies. With the soaring price of bitcoin offering new incentives to power-hungry “miners” – who already use more electricity than many countries – some are trying to argue that this can support the energy transition. Do they deserve a hearing?

What does diversity and inclusion really mean in a modern workforce, and what is the right approach for companies to take towards these issues? This is the focus of our next in-depth Moral Money Forum report, which features valuable insights from readers. Have your say by completing this short survey.

renewable energy

Can bitcoin ever be green?

If the term “sustainable bitcoin” seems like an oxymoron to you, you are not alone.

By far the world’s largest cryptocurrency, with a total market value of $1.2 trillion, bitcoin’s frighteningly energy-inefficient processing system uses more electricity each year than Ukraine or Pakistan, second estimates from the Cambridge Center for Alternative Finance. Much of that energy comes from power plants that burn fossil fuels. And to the extent that bitcoin “miners” consume renewable energy, critics argue, they are simply absorbing clean energy that could be used much more productively elsewhere.

So I was interested in speaking to Elliot David about Sustainable Bitcoin Protocol last week, at an FT digital assets conference in London.

Founded in 2021, this initiative issues tradable tokens to bitcoin miners who can demonstrate that they use energy from renewable sources or from burning waste methane at crude oil extraction sites that would otherwise have been burned or vented into the atmosphere. (Miners generate bitcoin by deploying stacks of computers to process and verify transactions.)

David, head of climate strategy at SBP, argued that bitcoin miners can galvanize investment in renewable energy, rather than simply absorb electricity that would have been produced anyway.

When grid electricity demand is less than potential supply, operators of renewable plants are subject to “curtailment,” meaning they must reduce or stop production because the electricity cannot be used or stored. By signing limited offtake agreements with bitcoin miners – or simply building their own bitcoin operations – renewable energy companies can secure better economics for plants that might otherwise seem too risky to develop, David argued.

Does this idea have merit? It is worth separating the argument for the SBP initiative from the argument that bitcoin can be green. SBP hopes that as interest in the cryptocurrency increases, more mainstream investors will place a premium on “cleaner” bitcoin. It has so far recruited miners who account for nearly a fifth of global bitcoin processing capacity, SBP says.

If bitcoin transactions are going to happen on a large scale over a long period – and with the price hitting a record high of $75,830 in March, this seems likely – then it seems preferable to have them powered by clean energy, rather than extending their duration. of fossil fuel plants (as has sadly happened since Montana TO in New York state). To the extent that the SBP can help incentivize this, it could play a constructive role.

The argument that Bitcoin’s energy consumption can be good for the climate and society in general is another matter. Notable defenders of bitcoin’s role in energy systems include Senator Ted Cruz of the Texas bitcoin mining hub, where the network operator often pays cryptocurrency miners to disrupt operations.

This system offers a rapid-response way to optimize demand, which may be useful given the growing share of intermittent renewables in Texas power generation. But energy storage systems can do much the same thing, keeping energy available for homes and factories.

Furthermore, the benefits to the grid may be outweighed by significant downsides to Texas families and businesses, for whom this huge new source of energy consumption has driven up electricity prices during periods of high demand. Wood Mackenzie Analysts estimated last September that “bitcoin mining already raises electricity costs for non-mining Texans by $1.8 billion per year, or 4.7%.”

This effect is unlikely to be limited to Texas. According to a January letter from the head of the US Energy Information Administration, about one in 45 units of electricity consumed in the United States is gobbled up by cryptocurrency mining. Bitcoin accounts for most of this due to its dominant market position and its “proof-of-work” distributed validation system, which is much more energy-intensive than rivals like Ethereum (bitcoin proponents say this makes it safer).

Concerns about the impact on network operations and consumer prices prompted the EIA to announce in January a mandatory survey of energy consumption by cryptocurrency miners: an effort that has been forced to fallfor the time being, after a legal challenge from crypto companies.

If the EIA investigation ultimately moves forward, its findings will likely exacerbate concerns about bitcoin’s energy and environmental impact. Despite the specific positive use cases outlined by SBP, it is difficult to believe that these can outweigh the broader complications caused by adding this huge new element to global energy consumption.

Although its growth has been driven primarily by speculation, cryptocurrency has the potential to play socially useful roles, as demonstrated by its incipient adherence by migrant workers for low-cost remittances. But the costs to energy systems and the climate are real.

“So far we don’t see such a high level of adoption and such scalability to really justify the energy use of the bitcoin network,” Larisa Yarovaya, director of the Center for Digital Finance at Southampton Business School, told me. “The question is whether there is enough utility to justify it.”

This article has been edited to clarify that the Sustainable Bitcoin Protocol issues tradable tokens to bitcoin miners using green energy sources, rather than certifying the bitcoin they generate

financing of fossil fuels

Banks continue to “increase their exposure to fossil fuels”

If the world was on track to meet the climate goals of the Paris Agreement, we would see a dramatic collapse in fossil fuel financing by major global banks. Like today Banking on Climate Chaos Report makes it clear that this is not happening.

The study shows that the world’s 60 largest banks by assets provided $706 billion in financing to fossil fuel companies last year. This is at least one figure lower than the $779 billion figure in 2022 and the peak of $956 billion in 2019. But it is financing a further huge expansion of fossil fuel production, which will likely drive the goal of limiting the global warming to 1.5°C. more out of reach.

And while many banks are reducing their financial support for oil, gas and coal, others have seen an opportunity to step in and grow. According to the report, JPMorgan Chase increased its fossil fuel financing by more than 5% to $40.9 billion last year, making it the world’s largest financier for the sector, a crown that has held since overtaking Citigroup in 2021.

The report found that Japan’s Mizuho Financial, in second place, also increased fossil fuel financing last year, as did Wall Street banks Morgan Stanley and Goldman Sachs and European lenders Barclays, Santander and Deutsche Bank.

It’s worth noting that the authors of this report – a large coalition of nonprofit groups coordinated by Rainforest Action Network – have made an important change to the methodology surrounding corporate finance deals. A bank’s financial figure now includes its contribution to corporate finance operations in which it played a support role, rather than just those in which it was lead bookrunner, as in previous years. This year’s report also reaffirmed previous years’ numbers in line with the new methodology, so the change is not the reason for the year-on-year increase in some banks’ funding figures.

Many banks have expressed concern about the report’s findings. Barclays said it did not recognize “the classification or attribution of some transactions” and criticized the authors’ focus on how much revenue its corporate clients derive from fossil fuel-related activities, rather than “the use of the proceeds of the transaction or the actual investment of the company”. activity”.

JPMorgan said it is helping to strengthen “today’s global economy” and that it believes its data “reflects our businesses more fully and accurately than third-party estimates.”

Deutsche Bank said its financed carbon emissions have fallen significantly in the oil, gas and coal extraction sectors and that it has “significantly reduced its commitment to carbon-intensive sectors since 2016”.

Santander said it was “fully committed to supporting the transition to net zero” and had set emissions reduction targets for 2030 across all sectors, including power generation and oil, gas and coal. The other banks mentioned declined to comment.

You’ll find more details in Attracta Mooney’s newsletter for the FT Here.

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News

Block Investors Need More to Assess Crypto Unit’s Earnings Potential, Analysts Say — TradingView News

Published

7 months ago

11 July, 2024

FinCrypt Staff

DeFi Lending Protocol Nexo Allocates $12 Million for Ecosystem Incentives — TradingView News

Block, a payments technology company led by Jack Dorsey square could become a formidable player in the cryptocurrency mining industry, but Wall Street will need details on profit margins to gauge the positive impact of the business on earnings, analysts said.

Block signed its first large-scale cryptocurrency mining hardware pact on Wednesday, agreeing to supply its chips to bitcoin miner Core Scientific CORZbut no financial details were disclosed.

JP Morgan estimates the deal could net Block between $225 million and $300 million, but said more information will be needed to assess the hardware business’s long-term earnings potential.

“We still have a lot to learn in terms of the margins of this business, so we are hesitant to underwrite this transaction until we know more about the cadence and economics,” J.P. Morgan said.

The deal marks a major step for the payments company, which started out as “Square” in 2009 before rebranding in 2021 in a nod to its focus on crypto and blockchain technologies.

Dorsey, who co-founded and ran Twitter (now known as “X”), has long been bullish on Bitcoin. Block began investing 10% of its monthly gross profit from Bitcoin products into Bitcoin in April.

In the first quarter, nearly 9% of the company’s cash, cash equivalents, and marketable securities consisted of bitcoin.

“This development (the deal with Core Scientific) is further evidence of Block’s role as an emerging leader in the crypto hardware ecosystem,” Macquarie analysts Paul Golding and Emma Liang wrote in a note.

Analysts say similar deals to follow could further validate Block’s reputation in the industry.

But J.P. Morgan said the stock’s performance will be determined by Block’s other segments, such as Square and Cash App.

Block shares have lost nearly 17% this year.

Source

News

This Thursday’s US Consumer Price Index could be a game-changer for cryptocurrencies!

Published

7 months ago

11 July, 2024

FinCrypt Staff

This Thursday's US Consumer Price Index could be a game-changer for cryptocurrencies!

3:30 PM ▪ 4 minute read ▪ by Luc Jose A.

This Thursday, attention will be focused on the United States with the anticipated release of the Consumer Price Index (CPI). This economic indicator could trigger significant movements in the markets, especially for the U.S. dollar and cryptocurrencies. While investors remain vigilant, speculation is rife about the potential impact of these key figures.

The Consumer Price Index: The Cornerstone of the American Economy

The Consumer Price Index (CPI) is a key measure of inflation which reflects changes in the price of goods and services purchased by American households. This index is calculated monthly by the Bureau of Labor Statistics (BLS) and serves as a barometer for the cost of living. The consumer price index covers a wide range of products, including food, clothing, housing, health care, and entertainment. Economists and policy makers closely monitor this data to anticipate economic trends and adjust monetary policies accordingly.

The June CPI data is due to be released this Thursday at 2:30 p.m., and is highly anticipated by investors. The current consensus is for headline annual inflation to decline to 3.1%, from 3.3% the previous month, while core inflation is expected to remain stable at 3.4%.

THE BIGGEST EVENT THIS WEEK 🚨

The U.S. Consumer Price Index is expected to
PUBLICATION TODAY AT 8:30 AM ET.

EXPECTATIONS ARE 3.1% WHILE
LAST MONTH THE CONSUMER PRICE INDEX (CPI) WAS 3.3%

HERE ARE SOME SCENARIOS 👇

1) CPI above 3.1%

THIS WILL BE A DAMAGE TO THE MARKET
GIVEN THAT THE LAST TIME THE CPI DATA… photo.twitter.com/yudjPLPl8g

— Ash Crypto (@Ashcryptoreal) July 11, 2024

Consumer Price Index Release: What Does It Mean for the Dollar and Bitcoin?

Inflation as measured by the consumer price index is a key determinant of the value of the US dollar. If the consumer price index declines more than expected, it could reinforce expectations of a rate cut by the Federal Reserve in September, thus weakening the dollar. A weaker dollar could benefit GBP/USD, which recently broke a major resistance level, and Bitcoin, which could see its price rise due to increased demand from institutional investors.

Current forecasts suggest that headline inflation will decline to 3.1%, with core inflation holding steady at 3.4%. However, a surprise increase in the consumer price index could upset these expectations. Fed Governor Lisa Cook has mentioned the possibility of a soft landing for the economy, with inflation falling without a significant increase in unemployment, which could lead the Fed to consider rate cuts. This outlook is particularly favorable for stock markets and cryptocurrencies, including Bitcoin, which could benefit from a more accommodative monetary policy.

According to experts at 10x Research, especially their CEO Markus Thielen, Bitcoin could see a significant increase if the CPI data confirms a decline in inflation. Thielen indicated that Bitcoin could reach almost $60,000, a prediction that has already been reflected with a rise to $59,350 before the data was released.

Therefore, Thursday’s CPI data could determine the future direction of financial and cryptocurrency markets. High inflation could strengthen the US Dollarwhile a drop in inflation could pave the way for rate cuts by the Fed, thus giving a boost to Bitcoin and other digital assets.

Enhance your Cointribune experience with our Read to Earn program! Earn points for every article you read and access exclusive rewards. Sign up now and start earning rewards.

Click here to join “Read to Earn” and turn your passion for cryptocurrencies into rewards!

Avatar of Luc Jose A.

Luke Jose A.

A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I am committed to raising awareness and informing the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. Every day, I strive to provide an objective analysis of the news, decipher market trends, convey the latest technological innovations and put into perspective the economic and social issues of this ongoing revolution.

DISCLAIMER

The views, thoughts and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Do your own research before making any investment decisions.

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News

Crowd Expects Bitcoin Bounce Suggests Further Losses, As RCO Finance Resists Crash

Published

7 months ago

11 July, 2024

FinCrypt Staff

Crowd Expects Bitcoin Bounce Suggests Further Losses, As RCO Finance Resists Crash

Bitcoin is seeing a rebound after its recent price crash to $53,000. Other altcoins are subsequently recovering, with many cryptocurrency investors increasingly making new entries. However, Santiment warned against this hopium, suggesting that Bitcoin could extend its price losses.

As the broader market anticipates Bitcoin’s next price action, RCO Finance (RCOF) demonstrates resilience, attracting thousands of people in influxes. Read on for more details!

RCO Finance challenges the market crisis

RCO Finance (RCOF) is approaching $1 million in funding raised, amid growing interest from institutional traders seeking stability from Bitcoin’s wild price swings. While much of the broader market has seen significant price losses, RCO Finance has remained resilient, experiencing a surge in its pre-sale orders.

As a result, the project seems oblivious to the current market conditions, leading top market experts to take a deep dive into its ecosystem. They identified why RCO Finance was able to withstand the bearish pressure and its potential to hold up even stronger during the impending broader market crash.

The main reason was related to the innovative use of RCO Finance AI Trading Tools as a Robo Advisor. This tool has been integrated into RCO Finance’s cryptocurrency trading platform, offering full automation and highly accurate market forecasts to help investors make informed decisions.

Read on to learn more about this tool and other exciting features of RCO Finance!

Bitcoin Bounces Amid Impending Crash

Bitcoin is bouncing back, rallying 8% after plunging to its lowest point since February on July 5. While this rebound has triggered a bullish wave in the broader market, many cryptocurrency analysts predict it could be short-lived as Bitcoin is poised for an imminent crash toward the $50,000 zone.

On a Post X (formerly Twitter)Santiment revealed that while the crowd is anticipating a Bitcoin rally, this potential crash could trigger FUD and panic, causing average traders to wither and give up on Bitcoin. The platform noted that Bitcoin rally has historically occurred after these weak hands sold their holdings.

In particular, these cryptocurrency analysts speculate that the previous and upcoming Bitcoin crash is largely the result of bearish market psychology, as opposed to large BTC sell-offs by the German government and Mt. Gox. In particular, Ki Young Ju, founder and CEO of CryptoQuant, noticed that “the sales were rather negligible, given the overall liquidity of Bitcoin.”

Enjoy seamless investing on RCO Finance

RCO Finance is making investing easier and easier, democratizing access to high-level tools and cryptocurrency earnings that were once reserved for professional and institutional investors. It has also prioritized accessibility, allowing investors of all levels to easily navigate its features through its intuitive interface.

Additionally, they can also maintain anonymity and privacy as the platform has no KYC requirements. To build trust, the platform has instead emphasized regular smart contract audits by respected security firm SolidProof.

Performance data shows massive adoption, indicating that it is doing its job effectively. Investors can also capitalize on RCO Finance’s fast transaction speeds and incredibly low transaction fees, with leverage options up to 1000x to further optimize their portfolios and maximize returns.

Leverage RCO Finance’s pre-sale earnings

An in-depth analysis of the RCO Finance ecosystem revealed that it has strong potential to rival and surpass major cryptocurrencies in the cryptocurrency industry. With a very limited total token supply and excellent tokenomics, RCO Finance is poised to reach its target of $1 billion in market cap upon its official launch.

RCO Finance has adopted a deflationary model, strategic burn mechanisms, and a vesting schedule. However, the project encourages long-term holding by focusing on sustained growth through incredibly high staking rewards.

RCOF tokens are currently available at an altcoin price of $0.01275 in progress Pre-sale Phase 1. This is likely the lowest price these coins will ever trade at, as they are expected to increase exponentially with each new presale phase.

With RCOF expected to be $0.4 at launch, investors jumping in now can expect a Return 30x on their investment!

For more information on RCO Finance (RCOF) presale:

Visit RCO Finance Pre-sale

Join the RCO Financial Community

Disclaimer: The statements, views and opinions expressed in this article are solely those of the content provider and do not necessarily represent those of Crypto Reporter. Crypto Reporter is not responsible for the reliability, quality and accuracy of any material in this article. This article is provided for educational purposes only. Crypto Reporter is not responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Do your own research and invest at your own risk.

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Bitget Ranks Third Among Cryptocurrency Exchanges by Capital Inflows in Q2

Published

7 months ago

11 July, 2024

FinCrypt Staff

Although Bitget is not the largest cryptocurrency exchange in terms of total volumes, it closed a favorable quarter. From April to June, the platform ranked third in net capital inflows and showed the strongest growth in market share compared to its competitors.

In the second quarter, investors moved $700 million into Bitget, and activity on the platform increased by nearly 50%.

The exchange has seen a surge in user funds, with Bitcoin (BTC), Tether (USDT), and Ethereum (ETH) rising 73%, 80%, and 153%, respectively, in the first six months of the year. This growth coincided with adding 2.9 million new users to the platform.

This has positioned Bitget among the top exchanges with the highest positive net inflows in the last quarter. Only Binance, which remains the market leader, and Bitfinex have performed better in this category.

According to CCData’s latest H2 Outlook Report, the exchange also recorded the highest market share growth among centralized exchanges, increasing 38.4% from H2 2023 to H1 2024.

Bitget’s spot trading volume has also seen a visible increase, going from $28 billion in Q1 to $32 billion in Q2, marking an increase of over 10%. The platform’s monthly visitors have reached 10 million. Although its volumes are increasing, Bitget still does not rank among the top 10 cryptocurrency exchanges in terms of spot trading.

The changes taking place in the centralized cryptocurrency exchange market show that competition is becoming more and more intenseAn example of this is the recent surge in popularity of Bybit, which has become the second largest exchange in terms of spot trading volumes.

Sports Sponsorships and New Products

Gracy Chen, Source: LinkedIn

Gracy Chen, CEO of Bitget, commented on the quarterly performance, saying, “Q2 2024 was a pivotal period for Bitget. Our collaboration with Turkish athletes, along with significant growth in users and website traffic, is part of our global expansion.”

In an effort to expand its global presence, Bitget has partnered with three Turkish national athletes as part of its #MakeItCount campaign, starring Lionel Messi. The deal with the famous footballer It was signed in Februaryto build brand presence in Latin America.

The exchange also launched a $20 million TON Ecosystem Fund in partnership with Foresight Ventures to support early-stage projects on The Open Network.

The exchange introduced two new initial token listing products, PoolX and Pre-market, which collectively launched over 100 projects. Additionally, Bitget’s native token, BGB, was recognized as the best-performing centralized exchange token in June and was ranked among the top 10 cryptocurrencies by Forbes.

In its latest move, the cryptocurrency exchange aimed to become a regulated player in IndiaThe announcement comes as the world’s most populous democracy grapples with the complexities of integrating cryptocurrencies into its financial ecosystem.

Even recently,
Bitget Wallet Announced a joint investment with cryptocurrency investment firm Foresight X in Tomarket, a decentralized trading platform. This initiative targets emerging asset classes and aims to expand the portfolio’s services beyond traditional decentralized exchanges (DEXs).

In the second quarter, investors moved $700 million into Bitget, and activity on the platform increased by nearly 50%.

According to CCData’s latest H2 Outlook Report, the exchange also recorded the highest market share growth among centralized exchanges, increasing 38.4% from H2 2023 to H1 2024.

The changes taking place in the centralized cryptocurrency exchange market show that competition is becoming increasingly intenseAn example of this is the recent surge in popularity of Bybit, which has become the second largest exchange in terms of spot trading volumes.

Sports Sponsorships and New Products

Gracy Chen, Source: LinkedIn

The exchange also launched a $20 million TON Ecosystem Fund in partnership with Foresight Ventures to support early-stage projects on The Open Network.

Source