Bitcoin is easily the best crypto to buy right now, but keep an eye out for this issue

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Bitcoin (BTC 2.44%) looks unstoppable right now, having broken through the $30,000 mark. The world’s most popular crypto really seems to be breaking away from the pack and is now up 85% for the year. Regulators appear to be ready to leave it alone and the Federal Reserve appears to be done tightening. These are all very good reasons why Bitcoin sentiment is currently extremely bullish.

However, there is one issue that has haunted Bitcoin for years, and that is the environmental impact of Bitcoin mining. Increasingly, Bitcoin is included in the global climate change agenda, and this will impact not only how investors view it, but also how regulators around the world view it.

Bitcoin mining and energy consumption

Over the past 12 months, lawsuits against Bitcoin on purely environmental and climate change grounds have intensified. In September 2022, the White House released an official report detailing the energy consumption of different cryptocurrencies, and Bitcoin featured prominently in the report. While modern proof-of-stake blockchains are remarkably energy efficient, older proof-of-work blockchains such as Bitcoin are not.

Image source: Getty Images.

And that’s not all. Greenpeace recently launched a new anti-Bitcoin ad campaign titled “Change the code, not the climate.” The goal, according to Greenpeace, is to clean up Bitcoin. And he will use many of the tactics he used against the oil and gas industry to make his point. For example, in March, Greenpeace placed a giant 11-foot “Satoshi skull” (named after Satoshi Nakamoto, the anonymous founder of bitcoin) right next to the New York offices of Fidelity Investments, which now offers bitcoin options. for retail. investors.

On April 9, The New York Times published a controversial exposition on how bad bitcoin is for the environment, focusing on the energy consumption of bitcoin mining. While many in the crypto community criticized the article as biased and factually inaccurate, the big picture is that climate change is a very big issue right now, and a lot of people — including some lawmakers and regulators – are very passionate. on this subject.

Possible scenarios

In my view, there are two possible scenarios. The most likely scenario is that Bitcoin manages to shake off this controversy again, as it has done in its 14-year history. Years ago, economists and academics published the same kind of reports, and what has really changed? Yes, bitcoin miners have embraced cleaner forms of energy, but bitcoin shows no signs of changing its proof-of-work protocol which requires crypto mining. And even the Canadian artist who created the “Skull of Satoshi” artwork has now recanted after huge backlash from the Bitcoin community.

But I think something fundamentally changed in September 2022. That’s when Ethereum transitioned from a proof-of-work blockchain to a proof-of-stake blockchain, immediately reducing its power consumption by 99.99%. If Ethereum can do this, why not Bitcoin? This is what makes Greenpeace’s current advertising campaign more effective than it would have been a few years ago. When he talks about “changing the code”, he is referring to moving from a proof-of-work blockchain to a proof-of-stake blockchain. Whatever you think of Greenpeace, it doesn’t seem like a drastic and unreasonable request.

Moreover, large institutional investors such as BlackRock may have locked themselves in a corner on this issue. BlackRock has been at the forefront of the environmental, social and governance (ESG) investment agenda and pushed for greener and more sustainable investments. exist ?

Should You Buy Bitcoin?

That being said, Bitcoin is clearly the best crypto investment on the planet right now. It’s hard to argue for any other crypto when Bitcoin is up 85% for the year. So I’m not trying to throw cold water on a torrid Bitcoin rally. I hold bitcoin in my wallet, and I’m optimistic that it can hit some pretty outrageous price targets in the future.

But I am also realistic. Look at the automotive industry, for example. Once activists decided to take it on, things changed forever. Is it possible to watch television these days without seeing commercials for electric vehicles? Right now, California plans to ban gas-powered vehicles by 2035, and the EPA just proposed tough new emission standards for vehicles. You can’t just ignore an issue, and I’m afraid some people in the Bitcoin community have their heads in the sand when it comes to climate change.

Bitcoin is a fantastic long-term investment. But if you’re starting to see the narrative about Bitcoin shifting, it’s worth taking notice. Any hint of a legal or regulatory overshoot on this issue in the US should be a red flag for Bitcoin bulls, as it may well be the only factor that can stifle the current Bitcoin rally.

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