Bitcoin Is an Incredibly Dirty Business

Institutional investors diving into Bitcoin — namely hedge funds — are eager to promote its unpredictable price swings as the sign of a new asset class in the making. The cryptocurrency has traded at between $5,000 and $40,000 over the past year, and arguing over its true value is like a scholastic spat about angels on a pin. Could it go to six figures? Seven? Is it actually worth nothing at all? The mystery only adds to its allure.

The speculative digital gold rush is understandable in this pandemic environment of easy money and widespread day-trader FOMO. But it’s notable that the non-virtual side of Bitcoin buying — namely the energy consumption needed to mine and maintain it — gets far less attention. Instead crypto is regularly lumped in with energy-transition trades such as Tesla Inc., another top retail-investor pick, regardless of the fact that buying Bitcoin pretty clearly makes an investment portfolio “less green,” as Barclays Private Bank’s Gerald Moser put it last week.