The Collapse of Bitcoin Could be Boon for Green Cryptocurrencies

We have previously talked about the environmental impact of bitcoin. While bitcoin doesn’t require the use of scare natural resources to produce like fiat currencies, it is still harmful to the planet for various reasons.

A press release from the White House shows that the carbon footprint of cryptocurrencies is up to 170 million metric tons of CO2 every year. The carbon footprint of mining bitcoin is rising even further. One analysis showed that the emissions produced from mining bitcoins increased 126 times between 2016 and 2021 and that cryptocurrencies could be as bad for the planet as the beef industry.

Well, it turns out that the market for bitcoin has fallen. This could actually be a good thing for the planet. More people may start investing in eco-friendlier cryptocurrencies instead.

Bitcoin Market Starts to Collapse

The absolute majority of people who bought bitcoins lost money on it, said the Bank for International Settlements (BIS), also known as the “central bank for central banks”.

Economists of the bank came to this conclusion after analyzing the data of investors in cryptocurrencies in 95 countries in the period from 2015 to 2022.

There are various reasons that bitcoin is losing popularity. Some investors are shying away due to concerns about sustainability, while others are worried about security. The currency has also lost some of its fad appeal. It appears that bitcoin is still popular overall, but many speculators only purchased it to increase their financial holdings and they are likely driving the price to more sustainable levels.

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“Approximate estimates indicate that about three-quarters of users have lost money on their investments in bitcoins,” the bank’s research published on November 14 states.

During the analyzed period, the price of Bitcoin increased from $250 in August 2015 to a peak of almost $69,000 in November 2021. It is currently trading at less than $17,000.

The number of people using mobile applications for crypto trading increased from 119,000 to 32.5 million during the same time.

The study showed that new investors mainly enter when the price of bitcoins goes up, and the largest crypto-owners, or so-called “whales”, who return their investments at their expense, profit from this.

Economists also found that the largest segment of new investors in cryptocurrency – approximately 40% – are young men under the age of 35, who are generally considered the most risk-averse. 

Economists’ conclusions confirm the thesis that most investors consider cryptocurrencies as speculative investments rather than as a means of real payment.

“We estimate that 73-81% of investors worldwide are likely to have lost money on their cryptocurrency investments. And the fact that larger investors (‘whales’) typically sell when smaller investors buy may be the basis for a deeper verification of claims about the “democratization” of the financial system thanks to cryptocurrencies,” the study says.

Could the Fall of Bitcoin Entice Investors to Pursue Eco-Friendly Cryptocurrencies Instead?

Bitcoin is becoming less popular for various reasons. Although environmental concerns are probably not the most significant, they certainly play a key role.

Some investors are clearly abandoning cryptocurrencies altogether. However, others are likely to move from bitcoin to other digital coins. As a result, they may start supporting some that are eco-friendlier.

Here are some of the more environmentally friendly cryptocurrencies on the market:

• Ethereum
• SolarCoin
• BNB
• Stellar
• Solana

Investors may want to purchase these coins as they become more concerned about sustainability. This will help make the cryptocurrency market eco-friendlier in the years to come.