Bitcoin's Energy Consumption Sparks Global Concerns

 

The Bitcoin ESG Forecast has revealed that Bitcoin mining using sustainable energy has increased to a new all-time high of 54.5%, with sustainable mining rising by 3.6% overall during the calendar year of 2023.

According to an article on its blog, The Bitcoin ESG Forecast analyse data from its Bitcoin Energy and Emissions Sustainability Tracker, or BEEST model and compared the sustainable energy mix of Bitcoin to other industries over the past four years using publicly available data.

According to the data, Bitcoin mining is currently the highest user of sustainable energy (54.5%) across multiple subsectors, and it has achieved an increase in sustainable mining of 3.6% for the calendar year of 2023 compared with other global industries.

The Bitcoin ESG Forecast found off-grid Bitcoin miners using methane emissions. According to the research, small oil producers in Canada and the U.S. pay for permits to flare natgas, with some venting methane directly, which is harder to detect.

However, some mining companies use vented methane to generate electricity for Bitcoin mining, reducing environmental impact compared to venting it into the air.

This means the Bitcoin network mitigates 7.3% of all its emissions without offsets, a new all-time high and the highest level of non-offset-based emission mitigation of any industry.

According to the article, additional off-grid renewable mining, such as Tether’s expansion into hydro mining in Latin America and the discovery of more off-grid methane-mitigating mining, means that the Bitcoin network uses more sustainable energy than ever.

After the ban on mining in China and its effective prohibition in Kazakhstan, miners predominantly moved to greener grids in North America or sustainable off-grid sites.

The post states that global grids are becoming greener at 0.7% per year, resulting in a 29% improvement in emission intensity for on-grid Bitcoin miners compared to 2021.

Bitcoin miners sold more than 10,000 Bitcoin in a single day on Jan. 17, registering the largest daily decline in miner reserves in over a year.

According to data from on-chain analytics provider CryptoQuant, Bitcoin miner reserves declined by 10,233 BTC on Jan. 17, which is roughly $450 million at current prices.

Miners typically go through phases of accumulation and selling. According to a 2023 Bitfinex report, miners began accumulating Bitcoin around mid-2023 when prices and profitability were lower.

When prices and profitability increase, such as in recent months, miners switch to a selling phase. Historically, miners sell coins to replenish cash flow or capture higher prices in a rally. The price of Bitcoin has been in the $42,000 to $43,000 range over the past few days.

The data also shows that Bitcoin miner reserves are at their lowest levels since July 2021 at 1.83 million coins. However, this is still a substantial stash valued at approximately $78 billion.

Over the past 12 months, BTC miner reserves have declined by 22,800 BTC, but the total reserve figure has been relatively stable since early 2021.

On Jan. 15, the Bitcoin Miners’ Position Index (MPI) started to tick up, indicating that possible selling was imminent, according to CryptoQuant.

The MPI is the ratio of total miner outflow to its one-year moving average of total miner outflow. On Jan. 14, Cointelegraph reported that Bitcoin mining firms Riot, TeraWulf and CleanSpark were the best-positioned to handle the significant cost increases expected following the BTC halving event in April or May.

Moreover, average hash rates have dropped to their lowest levels since October at around 400 exahashes per second, according to Bitinfocharts.

Meanwhile, several large mining facilities in Texas have recently powered down some of their operations to secure energy for the state amid extreme cold weather, as reported by Cointelegraph.