And while Van Eck offered that the standards being applied to the bitcoin and crypto world are not necessarily applied to other industries, he acknowledged that ESG concerns are becoming a major issue for bitcoin.
“There’s a good Cambridge University study that shows that 75% of miners use renewable energy,” he said, adding that just about 40% of their total energy comes from renewable sources.
He said that Riot Blockchain, a publicly traded bitcoin mining company, claims to use only renewable energy in its operations.
‘Blood Coin’
O’Leary posited that while bitcoin is ticketed for tremendous growth, it could be constrained in part if institutions that need to comply with ESG mandates are wary of buying bitcoin that’s mined in China or other locales deemed objectionable.
“You can tell the time of creation [of bitcoin tokens], but you can’t tell the location of creation,” O’Leary said. “And if you don’t want to own China coin, or, as it now is being called, “blood coin,” which sounds a lot like blood diamonds, you’re going to have to prove the provenance of where your coin was born, so to speak.”
He added that it could be a challenge for ETFs to show where bitcoin in their portfolios was mined.
Meanwhile, bitcoin and the crypto ecosphere in general are partying on—at least for the time being. Cathie Wood, whose firm has made its mark by promoting the concept of investing in innovative and disruptive companies, sectors and technologies, including bitcoin, unsurprisingly remains very bullish on the currency.
“We believe this is the first truly new asset class since the 1600s, since equities,” she said, noting that bitcoin now has a market cap of nearly $1 trillion.
“One trillion dollars is nothing compared to where this ultimately will be,” she said.