Greenpeace, an environmental defense organization, has expressed concerns over the recent approval of several spot Bitcoin exchange-traded fund (ETF) products by the U.S. Securities and Exchange Commission (SEC). The organization considers this approval a “watershed moment” as it believes it signifies the financial services industry’s increasing involvement in Bitcoin-produced pollution.
Greenpeace argues against several ETF endorsements
In response to the endorsement of Bitcoin ETFs by prominent financial entities like BlackRock and Fidelity, Greenpeace argues that these companies should play an active role in addressing the carbon emission problems associated with Bitcoin. Rolf Skar, the National Campaigns Director at Greenpeace USA, stated that the approval of Bitcoin ETFs makes it easier for investors to bet on Bitcoin, an asset that Greenpeace sees as having a significant pollution problem.
Skar highlighted the potential consequences of this approval, emphasizing that it poses serious challenges to ongoing efforts to reduce carbon emissions and mitigate the impacts of the climate crisis. According to him, the approval of Bitcoin ETFs marks a pivotal moment in the financial services industry’s acceptance of Bitcoin, a notoriously energy-intensive cryptocurrency. Additionally, Skar expressed concerns about the impact of ETF approval on Bitcoin’s price dynamics. He argued that the introduction of these financial products would likely drive up demand for Bitcoin, subsequently increasing its price.
Bitcoin ETFs and its effect on climate and society
Rolf Skar also explained that as Bitcoin’s value rises, more miners are incentivized to participate in the mining process, contributing to higher energy consumption. A key point of contention for Greenpeace is the environmental footprint of Bitcoin mining. Skar pointed out that the majority of the power used in Bitcoin mining comes from fossil fuels, leading to increased carbon emissions and water use. In essence, the approval of Bitcoin ETFs is seen by Greenpeace as a victory for executives at major Wall Street companies but a setback for both the environment and society.
Greenpeace’s opposition to Bitcoin’s environmental impact is not new. In 2021, the organization ceased accepting Bitcoin donations and has consistently advocated for changes to Bitcoin’s underlying code. Specifically, Greenpeace supports transitioning Bitcoin’s consensus mechanism from proof-of-work to proof-of-stake. This proposed change aims to reduce the energy consumption required to operate and secure the Bitcoin network. The organization’s stance reflects a broader debate within the cryptocurrency community regarding the environmental sustainability of various blockchain technologies.
While Bitcoin’s proof-of-work consensus mechanism has been criticized for its high energy consumption, alternative approaches like proof-of-stake offer a more energy-efficient solution. Greenpeace’s criticism of the approval of spot Bitcoin ETFs by the SEC underscores the organization’s ongoing commitment to addressing environmental concerns associated with cryptocurrency. The tension between the financial industry’s embrace of Bitcoin and the environmental impact of its mining practices highlights the complex challenges at the intersection of finance and sustainability.
