Can Ethereum expect huge investments from ESG investors?
Ethereum’s transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) is a fact. As a result, more and more people are becoming aware of the environmental benefits of the Ethereum network. There is speculation that ESG-focused investors will flock to Ethereum.
What is ESG?
ESG stands for Environmental, Social and Governance. An ESG-focused investor is someone who invests in projects that are environmentally and socially responsible. ESG investing has become extremely popular in recent years with both private investors and financial institutions. According to a Bloomberg – report on ESG investing, assets under management of ESG funds will reach $41 trillion by the end of 2022. Today, ESG-related assets account for one in three dollars managed globally.
Ethereum is attractive to ESG investors
Ehtereum’s transition to a Proof-of-Stake model, which has also been called “the merge” is mentioned, has caused the Ethereum network to use 99.95% less energy. One of the founders of Ethereum, Vitalik Buterin, retweeted a claim stating that the merge will reduce global electricity consumption by 0.2%.
This significant reduction in electricity consumption is attractive to ESG investors who care about reducing energy consumption. According to Conor Svensson, CEO and founder of Web3 Labs, other cryptocurrencies such as Bitcoin will become less attractive to ESG investors if these networks fail the Proof -of-Work method. Connor Svensson is convinced that:
“I do believe that Ethereum will overtake Bitcoin in the long run.”
The Flippening
Ethereum is, at the time of writing, the world’s second most valuable crypto asset with a market cap of over $173 billion. Some believe it is only a matter of time before Ethereum (ETH) will overtake Bitcoin (BTC) as the most valuable crypto asset. This event is also referred to as The Flippening” called. Yet, at this point, the total market cap of ETH is still less than half of the total market cap of BTC.
How do we at Miners Europe deal with the environment?
The environment is not only important for ESG investors. At Miners Europe, we also think it is important to contribute to a greener world. We do this, among other things, by constantly looking for other ways to host our cryptominers and those of our customers. For example, we are negotiating in Norway and Iceland where we can use hydro energy for our mining park. Thanks to the hydro-energy we can mine CO2 neutral. There are also more and more people who purchase a cryptominer for the overcapacity of their solar panels. Because we are all looking for greener solutions, crypto mining at Miners Nederland actually boosts innovation in the energy sector. After all, we ensure a greater flow of money to green energy projects.
