Bitcoin is easily the best crypto to buy right now, but watch out for this one issue

Bitcoin (BTC 2.44%) seems unstoppable right now, having broken through the $30,000 price point. The world’s most popular crypto really looks to separate itself from the pack, and is now up 85% for the year. Regulators seem willing to leave it alone, and the Federal Reserve appears to be done tightening. All are very good reasons why Bitcoin sentiment right now is overwhelmingly bullish.

However, there is one issue that has dogged Bitcoin for years and that is the environmental impact of Bitcoin mining. Increasingly, Bitcoin is being included as part of the global climate change agenda, and it is going to affect not only how investors perceive it, but also how regulators around the world view it.

Bitcoin mining and energy consumption

Over the past 12 months, the case against Bitcoin on purely environmental and climate change grounds has increased. In September 2022, the White House released an official report detailing the energy consumption of various cryptocurrencies, and Bitcoin featured prominently in the report. While modern proof-of-stake blockchains are remarkably energy efficient, older proof-of-work blockchains like Bitcoin are not.

Image source: Getty Images.

And that’s not all. Greenpeace recently launched a new advertising campaign against Bitcoin called “Change the Code, not the Climate.” The goal, says Greenpeace, is to clean up Bitcoin. And it will use many of the tactics it has employed against the oil and gas industry to make its point. For example, in March, Greenpeace placed a giant 11-foot “Skull of Satoshi” (named after Satoshi Nakamoto, the anonymous founder of Bitcoin) right next to the New York City offices of Fidelity Investments, which now offers retail Bitcoin options investors.

On the 9th of April The New York Times published a controversial expose on how bad Bitcoin is for the environment, focusing on the energy consumption of Bitcoin mining. While many in the crypto community considered the article biased and factually inaccurate, the big picture is that climate change is a very important topic right now, and many people – including some legislators and regulators – are very passionate. if it.

Possible scenarios

As I see it, there are two possible scenarios. The most likely scenario is that Bitcoin manages to shake off this controversy once again, as it has done throughout its 14-year history. Many years ago, economists and academics published the same types of reports, and what has really changed? Yes, Bitcoin miners have embraced cleaner forms of energy, but Bitcoin shows no signs of changing its proof-of-work protocol that requires crypto mining. And even the Canadian artist who created the “Skull of Satoshi” artwork has now retired after a fierce backlash from the Bitcoin community.

But I think something fundamental changed in September 2022. That was then Ethereum transformed from a proof-of-work blockchain to a proof-of-stake blockchain, instantly reducing energy consumption by 99.99%. If Ethereum can do this, why can’t Bitcoin? That’s what makes the current Greenpeace ad campaign more effective than it could have been several years ago. When it talks about “changing the code”, it talks about changing from a proof-of-work blockchain to a proof-of-stake blockchain. Whatever you may think of Greenpeace, it does not seem like a radical, unreasonable request.

In addition, large institutional investors such as Black stone may have backed themselves into a corner on this issue. BlackRock has been at the forefront of the environmental, social and governance (ESG) investment agenda, pushing for greener, more sustainable investments. So how does that square with a policy of embracing Bitcoin, which is arguably the least green crypto out there?

Should You Buy Bitcoin?

That being said, Bitcoin is clearly the best crypto investment on the planet right now. It’s hard to argue for any other crypto when Bitcoin is up 85% for the year. So I’m not trying to throw cold water on a red-hot Bitcoin rally. I have Bitcoin in my portfolio and I am optimistic that it could hit some pretty outrageous price targets in the future.

But I’m also a realist. Look at the car industry, for example. Once the activists decided to take it on, things changed forever. Is it possible to watch TV these days without seeing ads for electric vehicles? Right now, there are plans in California to ban gas-powered vehicles by 2035, and the EPA just proposed strict new vehicle emissions standards. You can’t just ignore a problem and I’m concerned that some people in the Bitcoin community have their heads in the sand when it comes to climate change.

Bitcoin is a fantastic long-term investment. But if you’re starting to see the narrative of Bitcoin change, it’s worth noting. Any hint of legal or regulatory crackdown on this issue in the US should be a wake-up call for Bitcoin bulls, because it could be the only factor that can stop the current Bitcoin rally.