Time for Bitcoin to Power Down?

Market Meditations | September 9, 2022

California recently agreed to ban gas-powered vehicles by 2035. Then this weekend they asked residents not to charge their electric cars in an effort to reduce the load on the electric grid. Now the Whitehouse has released a mandated report regarding the effects crypto mining has on the power grid. 

  • Earlier this year, the Whitehouse mandated that the Office of Science & Technology (OSTP) issued a report on ways to minimize the environmental impact of crypto assets. 
  • The report proposes that the EPA should provide technical assistance and initiate a collaborative process with states, communities, and the crypto asset industry to develop performance standards for the responsible design, development, and use of crypto asset technologies.
  • If these proposed guidelines are not effective, the OSTP suggests “the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining.

The crypto market’s recent rise in popularity has led to the creation of numerous mining companies, especially in crypto-friendly states. Not all states are welcoming the crypto expansion though. New York recently passed a two-year moratorium on certain crypto-mining operations. How will Bitcoin weather the increasing Environment, Social, and Governance (ESG) storm? Only time will tell.