Cathie Wood-led Ark Investment Management and digital payment company Square Inc.(NYSE:SQ) have teamed up to dispel the notion thatBitcoin(BTC) mining is damaging the environment.
What Happened: Ark Investment and Jack Dorsey-led Squarereleaseda whitepaper arguing that Bitcoin mining provides an opportunity to spur the global energy transition to renewables by serving as a complementary technology for clean energy production and storage.
“Combining generation with both storage and miners presents a better overall value proposition than building generation and storage alone,” the companies noted.
The companies believe that Bitcoin miners as a flexible and easily interruptible load option could likely solve the intermittency and grid congestion problems hampering the deployment of solar and wind energy, which are now the cheapest energy sources in the world.
The combination of miners with renewable and storage projects could improve the returns for project investors, allow for the construction of solar and wind projects even before the completion of lengthy grid interconnection studies, and provide the grid with readily available “excess” energy, according to the paper.
“The bitcoin and energy markets are converging and we believe the energy asset owners of today will likely become the miners of tomorrow,” the companies concluded.
Square is heavily invested in Bitcoin. Cathie Wood is also bullish on cryptocurrencies and hasacquired sharesin cryptocurrency exchangeCoinbase Global Inc.(NASDAQ:COIN), which recently made its debut on the Nasdaq stock exchange.
Why It Matters: The release of the research paper comes amid arguments that Bitcoin causes tons of carbon emissions and environmental degradation.
Bank of America analyst Francisco Blanchcriticized Bitcoin in March, noting that the Bitcoin network emits about 60 million tons of CO2 annually, roughly the same carbon footprint as the nation of Greece.
For every $1 billion of fresh inflow into bitcoin, Blanch estimates the cryptocurrency will generate additional CO2 levels equivalent to about 1.2 million cars with internal combustion engines.
Microsoft Corporation (NASDAQ:MSFT) founder Bill Gates has also expressed concerns about Bitcoin’s impact on climate change,notingin February that the cryptocurrency “uses more electricity per transaction than any other method known to mankind.”