There is considerable debate about bitcoin’s sustainability CV, and much of that consternation can be attributed to the mining process, which is quite energy intensive.
Bitcoin miners have surprising sustainability
As a result, there is considerable criticism of bitcoin miners as environmental criminals. However, that conversation is evolving in favor of crypto miners, and it may include exchange-traded funds such as Invesco Alerian Galaxy Crypto Economy ETF (SATO ).
SATO benchmarks the Alerian Galaxy Global Cryptocurrency-Focused Blockchain Equity, Trusts and ETPs Index and is home to more bitcoin miners, which, in the eyes of some experts, could give the fund more environmental, social and governance (ESG) identification than credit is given for.
“Bitcoin mining soaks up the surplus of unpredictable energy that these probabilistic systems produce, smoothing out demand curves and making these ‘zero carbon’ green energy products economically viable,” wrote Mickey Koss for Bitcoin Magazine.
In other words, a case can be made that the bitcoin mining industry is contributing to increased use of renewable energy and smoothing out some of the volatility associated with the reliability of these power sources.
But wait – there’s more. Bitcoin mining servers offer another advantage: they can actually mitigate rising energy costs for regular customers, further strengthening SATO’s ESG chops.
“It also prevents or slows rising energy costs for consumers. Every watt produced by additional energy sources (such as solar panels at home) means at best lost revenue for the utility company, if not outright loss if the large solar plants produce enough energy,” Koss added.
Another point in favor of bitcoin miners in the sustainability conversation is that as more power sources come online, utilities may have to deal with supply outstripping demand. When that happens, electric companies are forced to incur costs associated with the excess supply, and those costs can be passed on to consumers. Bitcoin mining can help improve that scenario.
“Bitcoin fixes this, too. It can help soak up excess supply from producers, allowing energy companies to reduce the growth in electricity prices,” Koss concluded. “Bitcoin incentivizes clean, abundant and cheap energy for all. Green energy stimulates mining and coal production. Bitcoin is ESG.”
About a dozen of SATO’s 43 member firms are bitcoin miners, underscoring the ETF’s influence to the industry’s improved energy profile.
For more news, information and strategy, visit Crypto Channel.
vettafi.com is owned by VettaFi, which also owns the index provider for SATO. VettaFi is not a sponsor of SATObut VettaFi’s affiliate receives an index license fee from ETF sponsor.
