- Kevin O’Leary reiterated his view that bitcoin mining needs to use more renewable energy.
- The investor said a flood of institutional money will come in once there’s more clarity about bitcoin’s sustainability.
- Bitcoin miners say they are increasingly moving towards using renewable energy to power rigs.
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Kevin O’Leary reiterated his view that bitcoin mining needs to pivot towards more sustainable practices during a Monday webcast at the Consensus by CoinDesk 2021 convention.
Despite bitcoin’s recent sell-off, the Shark Tank investor said that institutional interest is just in it’s early innings, as less than 1% of institutions globally carry cryptocurrency as an asset class. One reason for the relatively slow pace of adoption is that firms have sustainability committees that screen every investment and filter ones that don’t meet ESG standards, he said.
“The fact that they’re going through this process, I consider a very positive sign,” for crypto, O’Leary added.
Now that institutional investors are interested in being exposed to bitcoin, miners must ensure that bitcoin can meet firms’ ESG standards.
Estimates from the University of Cambridge say the total yearly electricity consumption of the Bitcoin network is 113.74 terawatt-hours. It’s a staggering amount, but miners say they are increasingly moving towards using renewable energy to power the Bitcoin network.
O’Leary said the number one question he asks a mining project before investing in it is how is the project dealing with ESG.
The Shark Tank investor also suggested there should be a way to “tag” a bitcoin and prove that it came from a sustainable energy source. While this isn’t a practice yet, he claimed the technology was “being worked on,” and when it’s available, a flood of institutional money will come into bitcoin.
“It will be the reason it goes to $100,000, $200,000,” O’Leary said, “That’s not going to happen until institutions start to buy it. So everybody’s got to wake up and realize there’s demand, but it has to be done around ESG concerns.”
Bitcoin sold off last week in part due to a tweet from Elon Musk regarding bitcoin’s energy consumption. On Monday afternoon, the cryptocurrency jumped to just under $40,000 after the Tesla CEO tweeted: “Spoke with North American Bitcoin miners. They committed to publish current & planned renewable usage & to ask miners WW to do so. Potentially promising.”
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