A new survey from Forbes Advisor has warned that the majority of Americans are not aware of the energy and environmental threats Bitcoin mining poses.
Research from the investing experts has revealed that 84% of Americans do not believe that Bitcoin investments are a threat to the environment. Such findings are startling, in comparison to the great impact that it truly has on energy consumption and carbon emissions.
Those unaware of the significant damage bitcoin mining has on the environment consist of one third (32%) believing there to be no impact and one quarter (26%) understanding there to be a slight threat, but not significant enough to cause an impact. Meanwhile, over one quarter (26%) of people believe quite the opposite, claiming Bitcoin to be good for the environment. However, the reality is scarily different.
An analysis from Forbes Advisor has uncovered that U.S. Bitcoin miners generated 0.85 pounds of carbon dioxide per kilowatt-hour of energy used in 2020. Bitcoin mining is estimated to produce 40 billion tons of carbon dioxide, and the U.S. accounts for more than 37% of the world’s total Bitcoin mining capacity.
Joe Sweeney, the managing partner at Cornerstone Wealth, says Bitcoin is a problem for any investor concerned about ESG principles.
“With so much focus on ESG investing, Bitcoin mining has never been good from an energy consumption standpoint. Of course, it’s worse today given supply constraints due to the Russia-Ukraine war,” Sweeney says.
Further insights unveiled that just over one in twenty Americans (6%) are aware of the great level of carbon emissions Bitcoin mining sets off. Therefore, it is imperative that investors understand the risks posed, in order to make well-informed investment decisions.
The Majority of Americans Want Environmentally-Friendly Investments
While many Americans are unaware of the impact that Bitcoin has on the environment, the good news is that research shows that the majority favour more environmentally friendly investments. Approximately 58% of respondents who own some form of investment assets say they would avoid stocks because of their environmental impact, including 68% of Gen Z and 63% of Millenial investors.
This attitude has created a great impact in the investment space in a short time. Between January – November 2021, ESG-focused funds saw a record $649 billion in inflows. This is more than double the $285 billion ESG fund inflows seen throughout the same time in 2019.
While this is welcoming news, the research found that that 44% of respondents were more concerned about a crypto investment’s potential return than its environmental impact.
When asked to state the most important factors when it comes to investing in cryptocurrency, over half (56%) of respondents above the age of 77 claimed environmental impact to be a deciding factor. Meanwhile, two fifths (41%) of millennials claimed it to be a key decision-maker, whereas just 38% of Gen Z name it as the main consideration.
However, when respondents were asked if they have actively avoided investing in certain stocks because of their environmental impact, over half of Gen Z respondents (54%) claimed they had in the past. Meanwhile, 63% of the silent generation (77+) claimed they had previously, while almost two in three (61%) of millennials to have done so.
So, while the environmental impact may not be the most important deciding factor for investors, it seems Americans are still making conscious decisions to invest sustainably where possible.
Further findings unveiled that the most important factor when it comes to investing in crypto for participants is the return on investment, which over two in five respondents claim to be a key consideration (41%). This was followed by the cost to purchase price (39%) and balancing one’s portfolio (38%). Over a third of respondents (36%) claim environmental impact to be a great consideration.