ESG vs Bitcoin
ESG vs Bitcoin
Last weeks, Tesla announced that it has bought 1,5 billion Dollar worth of Bitcoin for providing more flexibility within investment management, maximasing returns on its cash flow management and use in exchange for its products. As of transaction date, Tesla has had 19 billion cash or cash equivalents so this means Tesla invested roughly 8% of its whole financial sources on Bitcoin!
Beginning from the ground, Tesla adopted ‘Clean Power’ as the Company’s motto and would like to be the hero of low-carbon technology and pioneer of zero-emission in the automobile industry. Besides this white page, Bitcoin, like all other digital currencies, is created with high-power computers for solving complex mathematical puzzles which need an energy-intensive process. According to the recent studies of the International Energy Agency shows that the mining process consumes more or less the same amount of energy as the annual energy consumption of the Netherlands. Furthermore, it has been observed that the consumption is generally relies on coal which is found as the dirtiest among all fossil fuels.
Even if this step was found as huge for cryptomarkets, someone from other parts of the investment jungle was not so happy! Many preferred Tesla investors are classified as ‘ESG (Environment, Social, Corporate Governance) Compliant’ funds because Tesla is positioned itself as a ‘green company’ from the beginning. The common point of these funds is checking all managerial decisions of their contribution plans not from the asset management side but also from the liability side! This is one of the main rules in ESG compliant investment scheme and using Bitcoin within its all financial body (asset-liability), Tesla has now a clear and massive conflict within its company vision and daily execution.
Some of its investors also specified recently that Bitcoin does not have any common point with sustainability in the investment industry and also Tesla did not put any explanation on rumors in capital markets. On another side, recent researches showed that Bitcoin carbon print (36,95 million tons / yearly emission) has lower than watching YouTube and gaming (39,6 million ton / yearly emission). Furthermore, data centers (190,9 million ton / yearly emission) and end-user devices (439,9 million ton / yearly emission) have more carbon footprints as well.
Every study opens new insights and puts a new perspective on ESG awareness and crypto markets. Let’s wait and see which is stronger than, green or greedy economy! We will touch on more points about the following steps of disruptive players in the cryptocurrency markets in the following articles. For any further questions, please reach us via contact@cryptoindexseries.com or visit our CryptoIndexSeriesTM Platform for a better analysis of the crypto market space.
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