The Bitcoin (CRYPTO: BTC) price is down 1.3% over the past 24 hours. One Bitcoin is currently worth US$54,203 (AU$70,400). At that price, the world's largest crypto has a market cap of US$1.01 trillion, according to data from CoinDesk.
Bitcoin is now down 12% from its record US$61,557, which it reached less than 2 weeks ago on 14 March. However, the digital token is still up more than 85% in 2021. And it's up more than 700% over the past 12 months.
That's great news if you bought and held onto Bitcoin over the past months.
But according to Bank of America, it's far from great news for mother earth.
Why Bank of America is sounding the alarm on a rising Bitcoin price
You may have heard that the currency uses a good bit of energy. That's because the Bitcoin miners, those companies using vast arrays of computers to verify transactions and "mine" new Bitcoins, obviously need to plug into a power source.
But you may not be aware of just how much power Bitcoin really uses. Or that, as Bank of America Corp (NYSE: BAC) revealed in a report, as the Bitcoin price rises, the cryptocurrency uses more power.
Commentary
As Bloomberg reports, according to Bank of America:
The level of emissions, which have risen alongside a spike in Bitcoin's price, have grown by more than 40 million tons in the past two years. And when the digital asset is trading around $50,000 – which it's done for much of this year – it uses about 0.4% of global energy consumption.
And as the Bitcoin price rockets, so too does the incentive to mine more of it. Not to mention the US$61 billion worth of transactions that needed blockchain verification over the past 24 hours.
Francisco Blanch is the head of commodities and derivatives research at Bank of America. Blanch said:
What I'm concerned about is the pace of growth in the demand for energy. The rate of change is enormous — nothing is growing at this pace in the energy world… Right now, this thing is taking a lot of energy and it's possible that if everyone comes in and prices go higher, then it's going to be way more energy.
So how much energy does Bitcoin use at the current price?
According to the Bank of America report, Bitcoin now uses more energy than the Czech Republic, Chile, or Greece. And it's within a whisker of overtaking the energy usage of the Netherlands. And with much of the global Bitcoin mining conducted in China, which relies heavily on coal-fired power plants, the crypto's carbon footprint is reported to equal that of American Airlines Group Inc (NASDAQ: AAL).
While Bitcoin fans point out that other financial transaction (such as printing and moving around cash) also use energy, it will be interesting to see if the Bitcoin exchange-traded funds (ETFs) come under fire from the rising trend of environmental social governance (ESG) investors.
