Last Thursday, Tesla founder Elon Musk made waves when he announced his company would no longer accept bitcoin as car payments.
Bitcoin plunged as much as 17% on the news…
This was a stunning about-face for Musk.
Just two months earlier, he bragged Tesla would accept bitcoin as payment. And in February, Tesla invested $1.5 billion of its corporate treasury in bitcoin.
So why did Musk change his tune?
He cited environmental concerns over bitcoin mining. Here’s what he tweeted last Thursday…
Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.
Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.
Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.
If you’ve also come to believe that bitcoin mining ruins the environment, I can’t blame you. The mainstream press has spread this misleading narrative for months now.
They say bitcoin mining contributes to global warming… Or warn it’ll overwhelm the U.S. electrical grid… Or claim it uses more energy than Sweden.
Friends, let me warn you. As bitcoin adoptions soars, these angry voices that have gotten bitcoin wrong from day one will get louder and louder.
So let me set the record straight…
Bitcoin is More Eco-Friendly Than Gold and Banking
I had my team dig into bitcoin’s energy usage. And what they found might surprise you.
According to the Cambridge Center for Alternative Finance, bitcoin mining currently consumes around 110 terawatt-hours (TWh) per year… or about 0.55% of global electricity production.
It’s roughly equivalent to the annual energy use of a small country like Sweden. But these numbers are never put in context.
Let me explain…
Since bitcoin is a store of value and independent monetary network… you can compare its energy usage to that of the banking and gold mining industries.
Bitcoin mining uses 110 TWh of energy and produces 70 metric tons (Mt) of CO2 annually. (CO2, or carbon dioxide, is a greenhouse gas.)
By comparison, the banking system uses an estimated 700 TWh of energy and produces 400 metric tons (Mts) of CO2 every year. And the gold industry uses 265 TWh of energy and produces 145 Mts of CO2.
So banking and gold mining uses 536% and 141% more energy, respectively, than bitcoin mining… And they produce 471% and 107% more greenhouse gases, respectively.
But you don’t see the press criticizing banks for the number of buildings they own… or computers they run… or data centers they operate. And they’re not out there calling for lawmakers to close gold mines.
So if bitcoin mining is hurting the environment like critics claim… why aren’t we seeing the same anger directed at the traditional banking system?
It’s an important question you must ask yourself. Who benefits from dinging bitcoin’s price over the short term?
I’ll tell you who… The legion of bankers who are now plowing their clients’ capital into bitcoin.
This reminds me exactly of what I saw in September 2017 when JPMorgan Chase CEO Jamie Dimon called bitcoin “a fraud.”
At the time, bitcoin dropped 21%. I was left scratching my head wondering why on earth the world’s most powerful banker would bother criticizing what was then a relatively small asset?
I didn’t have to wait long for the answer.
According to the public trading logs of banker Nordnet, we discovered JPMorgan traders in London were busy buying bitcoin all the while Dimon was publicly trashing it.
I wouldn’t be shocked if we find out Wall Street firms (and maybe even Elon Musk himself) have been heavily buying through this trumped-up environmental story.
Here’s The Real Story on Bitcoin Energy Use
Here’s what’s really happening with bitcoin’s energy use…
Unlike Wall Street and gold miners, bitcoin miners are taking steps to actually reduce their reliance on fossil fuels.
According to a 2020 study from the Cambridge Center for Alternative Finance, about 76% of crypto miners use a mix of renewable and traditional energy sources to power their operations…
The same study also found that about 39% of crypto mining’s total energy consumption comes from renewable sources.
In addition to current “green” operations, several large miners are in the process of moving more of their mining to renewable sources.
Gryphon Digital Mining has raised $14 million to build a renewable U.S. mining operation.
DMG Blockchain and Argo Blockchain have partnered to develop the first-ever bitcoin mining pool run exclusively on renewable energy.
Genesis Mining has established an operation in Iceland that’s powered by geothermal energy.
Bitfarms has partnered with Canadian utility Hydro-Quebec to use hydropower for its mining operations.
And billionaire investor Peter Thiel contributed $50 million to launch a wind-powered bitcoin mining operation in Texas.
If these projects are any indication, bitcoin miners are taking environmental sustainability very seriously.
The Mainstream Freaking Out = Time To Buy More
Friends, we’ve seen this movie before…
In September 2017, on the same day as Dimon’s comments and bitcoin’s 21% crash, the Chinese government said it would ban the crypto…
And in November 2017, bitcoin plunged 23% after the bitcoin hash rate dropped more than one-third in a 24-hour period.
Remember, this is just the trading madness that has always surrounded bitcoin. This asset will go up 30–40% on no news… and drop 30–40% on no news, too. You’ll also see people panic on price drops, just like they are now.
The good news is bitcoin miners are taking concrete steps to reduce their carbon footprint. Not because they love the environment… but because they’re finding renewable energy can be far cheaper than nonrenewables.
Friends, I would rather put my faith in well-aligned economic incentives like that than in the virtue signaling platitudes of Musk and the traditional banking system.
You must view volatility as the price of admission when it comes to making life-changing gains from crypto.
Treat this pullback for what it is…. An excellent buying opportunity. That’s because the long-term trend of mass adoption is still intact. So keep that in mind.
Financial powerhouses like Goldman Sachs, Morgan Stanley, and JPMorgan all have plans to offer their customers access to this asset class.
If they thought environmental concerns would derail bitcoin adoption… would they invest billions into building out these platforms for their customers? Clearly not.
As I’ve said before, watch what Wall Street does… Not what it says.
The media loves to focus on negative narratives about bitcoin. First it was “bitcoin is for criminals.” Now, it’s “bitcoin is bad for the environment.”
Each time, bitcoin has come back stronger than ever.
This too shall pass…
Let the Game Come to You!
Editor, Palm Beach Daily
P.S. As bitcoin operations become more sustainable, even more financial institutions and businesses will expand crypto access to their customers…
And right now, one evolving crypto technology is on trend to create more than 800,000 new millionaires over the next three years… a trend that will only accelerate as bitcoin adoption explodes.
At the same time, I estimate nearly 99% of Americans have no idea about the opportunity before them… or that they can potentially ride its coattails to fortune for as little as $10.
Click here for the full story on what I predict will be the biggest shift of wealth and power in modern history… and how you can be a part of it.