Cathie Wood’s ARK at odds with Musk over Bitcoin environmental impact
Investing.com
Published May 18, 2021 11:03
By Samuel Indyk
Investing.com – The debate about cryptocurrencies, particularly Bitcoin, and the impact on the environment has gone up a level after Cathie Wood’s ARK Invest commented on Tesla’s decision to stop accepting Bitcoin as payment for vehicles.
“In our view, the concerns around Bitcoin’s energy consumption are misguided,” said ARK cryptoasset analyst Yassine Elmandjra in an emailed statement. “Contrary to consensus thinking, we believe the impact of Bitcoin mining could become a net positive to the environment.”
h2 Tesla and ARK/h2The differing in opinion now puts ARK in direct opposition to Tesla (NASDAQ:TSLA), the largest holding in its flagship fund, the ARK Innovation ETF (NYSE:ARKK).
Elmandjra thinks Tesla’s decision to stop accepting Bitcoin is based on a plan by private equity company Greenidge to revive a coal power plant to mine Bitcoin. However, Elmandjra notes that Greenidge’s plant is powered by natural gas and that they bought carbon credits to offset the emissions.
ARK’s view that Bitcoin could actually benefit the environment is at odds with general consensus. Most are aware of the large computing power needed to mine and transact Bitcoin and other cryptocurrencies, but ARK has argued previously that Bitcoin is much more efficient than traditional banking and gold mining on a global scale.
“Traditional banking consumes 2.34 billion gigajoules (GJ) per year and gold mining 500 million GJ, while Bitcoin consumes 184 million GJ, less than 10% and 40% of traditional banking and gold mining, respectively,” ARK previously noted .
Despite Musk’s concerns over Bitcoin’s energy usage, the billionaire has not completely turned his back on cryptocurrencies and other digital assets. In a series of tweets, Musk has confirmed that Tesla had not sold its Bitcoin holdings and that he continues to “strongly believe in crypto”.
That will be music to the ears of ARK, who also own shares in other companies in the cryptocurrency space such as crypto exchange Coinbase (NASDAQ:COIN) and payments company Square (NYSE:SQ).
Get The App
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.