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.”
Tesla and ARK
The 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).