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Is it Possible to Invest Ethically in Bitcoin and Other Cryptocurrencies?

Shutterstock Photo License - By makesushi1



Modern investors aren’t just concerned about maximizing their returns. Of course, they want to make their money work for them. However, they are also thinking about the ethics of the investments they make.

Cryptocurrencies are one of the top investment options right now, but how do they stack up from an ethical perspective? As an eco-friendly investor, can you plow your hard-earned cash into them without feeling guilty about the impact?

The eco issue is being addressed

The main sticking point for would-be crypto investors is the environmental impact. Bitcoin is estimated to account for a little over half a percent of all energy produced globally, putting it on level pegging with a small country in terms of its carbon footprint.

This is obviously not ideal. But then Bitcoin isn’t the only game in town, and certain alternatives have been set up specifically to reduce their energy use. Cardano is a good example of this, and Ethereum has recently shifted over to a new approach to transaction validation that shrinks its own energy requirements significantly.

It is also important to recognize that more cryptocurrencies are going green, according to an EBR report. This is welcoming news for people that care about sustainability.

If you’re keen on calculating your own carbon footprint and you’re worried about crypto’s role in perpetuating climate change, it’s possible to avoid the concerns if you invest savvily.

Some crypto exchanges let you buy using a credit card

Another of the ethical concerns around crypto is due to how in its early days, Bitcoin in particular was used for money laundering, as well as other types of criminal activities.

In turn there have been concerns around the security of crypto purchases, with instances of fraud and outright hacking leading to breaches and theft of coins worth millions.

Today, the rise of exchanges has helped clean up the act of the scene a lot, and there are many guides on how to  buy crypto with a credit card showing how consumer protections have been implemented as more people have gotten involved in the industry.

What is more, it’s unhelpful to see crypto as solely responsible for the financial ills of the world; fiat currencies have been deployed for money laundering and fraud purposes for as long as they have existed. Thus it’s wise to get a wider context for any discussions surrounding Bitcoin and its contemporaries, rather than making broad assumptions based on a narrow view of the market.

Diversity is essential for investors

Hopefully it is now apparent that making ethical investments in cryptocurrencies is not out of the question, and indeed can be achieved if you’re willing to do your research and not fall for the hype on either side of the argument.

However, what you should not do is be won over entirely by the allure of crypto, even though there have been many instances of early adopters seeing unheard of returns from their investments.

It may still seem as though we are just at the beginning of the crypto journey, but this is simply not the case. All of the major jumps in coin values are over, save for those most volatile meme coins which can skyrocket just as quickly as they can crash due to often underhanded tactics.

The long and the short of it is that it only makes sense to invest in crypto if you are doing so as part of a wider portfolio of investments, including stocks and shares, as well as bonds and other tried and tested financial products.

We have seen the rise in so-called ethical investments in recent years, as well as claims of greenwashing and proven instances of apparently eco-conscious companies being shown to be less than honest. Having a healthy degree of skepticism about any opportunity you come across is therefore advisable.

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