The World Bank rejects El Salvador’s request for help implementing bitcoin due to the token’s climate impact

World Bank spring meeting
The World Bank is an international organization that supports developing countries.

El Salvador has asked the World Bank for help implementing bitcoin as legal tender, only to be swiftly rejected, with the international organization citing the cryptocurrency’s climate impact and lack of transparency as the reason.

The Central American country became the first in the world to vote to make bitcoin legal tender last week.

On Wednesday, El Salvador’s finance minister Alejandro Zelaya said the country had asked the World Bank for technical assistance in making the move become a reality.

Yet the international organization – which provides financing and economic support to developing countries – quickly declined the request.

“While the government did approach us for assistance on bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings,” a World Bank spokesperson told Insider.

The World Bank is one of many institutions to highlight bitcoin’s environmental impact. And its concerns about the cryptocurrency’s transparency echo those of central banks and regulators around the world, who worry it is used for money laundering and drug crime.

The computing process that secures the network and creates new bitcoins is incredibly energy intensive, using as much energy each year as whole countries, according to research by Cambridge University.

El Salvador’s request for help, and rejection, are signs that implementing bitcoin as a national tender may be more easily said than done. The government plans for bitcoin to be used for everyday payments and transactions alongside its current legal tender, the US dollar.

The International Monetary Fund last week said it has legal and economic concerns about the move. IMF spokesperson Gerry Rice told a press briefing: “Crypto assets can pose significant risks and effective regulatory measures are very important when dealing with them.”

Nonetheless, El Salvador’s decision boosted bitcoin, which had fallen as low $31,000 in early June. The cryptocurrency traded at $39,220 on Thursday, up around 1.8% for the day.

Read the original article on Business Insider

El Salvador asks World Bank for help implementing bitcoin – but quickly gets rejected over mining’s climate impact

El Salvador bitcoin people
El Salvador is making bitcoin legal tender alongside the US dollar.

El Salvador has asked the World Bank for help implementing bitcoin as legal tender, only to be swiftly rejected, with the international organization citing the cryptocurrency’s climate impact and lack of transparency as the reason.

The Central American country became the first in the world to vote to make bitcoin legal tender last week.

On Wednesday, El Salvador’s finance minister Alejandro Zelaya said the country had asked the World Bank for technical assistance in making the move become a reality.

Yet the international organization – which provides financing and economic support to developing countries – quickly declined the request.

“While the government did approach us for assistance on bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings,” a World Bank spokesperson told Insider.

The World Bank is one of many institutions to highlight bitcoin’s environmental impact. And its concerns about the cryptocurrency’s transparency echo those of central banks and regulators around the world, who worry it is used for money laundering and drug crime.

The computing process that secures the network and creates new bitcoins is incredibly energy intensive, using as much energy each year as whole countries, according to research by Cambridge University.

El Salvador’s request for help, and rejection, are signs that implementing bitcoin as a national tender may be more easily said than done. The government plans for bitcoin to be used for everyday payments and transactions alongside its current legal tender, the US dollar.

The International Monetary Fund last week said it has legal and economic concerns about the move. IMF spokesperson Gerry Rice told a press briefing: “Crypto assets can pose significant risks and effective regulatory measures are very important when dealing with them.”

Nonetheless, El Salvador’s decision boosted bitcoin, which had fallen as low $31,000 in early June. The cryptocurrency traded at $39,220 on Thursday, up around 1.8% for the day.

Read the original article on Business Insider

Cathie Wood and Anthony Scaramucci discussed institutional investment in digital assets, brushed off bitcoin’s ESG woes, and warned investors about excessive leverage in a recent interview. Here are the 10 best quotes.

Cathie Wood
Cathie Wood is the CEO and chief investment officer of ARK Invest, which runs three of the highest-returning stock ETFs of the last three years.

  • Bitcoin bulls Cathie Wood and Anthony Scaramucci sat down for an interview with Bitcoin Magazine last week.
  • The pair praised bitcoin as a crypto “reserve currency,” but warned investors of the risk of leverage.
  • Scaramucci said he sees bitcoin hitting $100,000 by the end of 2021. Here are the 10 best quotes.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Crypto bulls Cathie Wood of Ark Invest and Anthony Scaramucci of Skybridge Capital sat down for an interview last week with Bitcoin Magazine.

The pair praised digital assets, brushed off recent environmental concerns, and talked about their start in the crypto space during the conversation.

They also warned cryptocurrency investors to be careful with excessive leverage, with Scaramucci calling the practice a “knife in the steering wheel of your sports car.”

Here are the 10 best quotes from the interview, lightly edited and condensed for clarity:

Cathie Wood

  1. “Our conviction in bitcoin has only increased over the years. And I think the big exclamation point for me, in the early days, was my mentor Art Laffer…we were collaborating on a white paper and I said ‘Art, how big could this be.’ And he said, ‘well, how big is the US monetary base,’ at that time, it was $4.5 trillion today, it’s closer to $7.5 trillion, and so we ran with it and haven’t regretted it for one minute since.”
  2. “Bitcoin is the reserve currency of the crypto-asset ecosystem. It is the flight to safety currency. And I do believe that’s still the case.”
  3. “Beware, from a leverage point of view, you can lose everything out there in crypto if you’re a leveraged player. So buyer beware, be careful, but hang on for a beautiful ride.”
  4. “Putting bitcoin mining into a solar powerwall merchant power ecosystem so that it could absorb all the extra energy coming from the sun after the powerpack is filled up. That would add a new dimension of economics to this ecosystem and would encourage homeowners and utilities to add more solar than otherwise would be the case. So it’s actually going to accelerate the movement into renewables. I think that’s what’s going to bring institutions back.”
  5. “I think we used a million Monte Carlo simulations to figure out if institutions start going in, where will they go? Well, they’ll tiptoe in….according to those simulations, in order to maximize the Sharpe ratio, an institution might move towards 6% of a portfolio in bitcoin. In order to minimize volatility and enjoy the increased return associated with crypto, that percentage might be more like 2.5%.”

Anthony Scaramucci

1. “When I came out of the White House and got blown into Pennsylvania avenue, the first thing I did was buy the URL skyrbridgebitcoin.com. Why? It became very clear to me in my short stay in Washington that we would eventually be digitizing US currency…but I have to confess I was still very cautious. So I had a checklist, and there were three things on the list. Number one: were there at least a hundred million users…number two: what was the US regulatory landscape…was it going to be accepted clearly here…third thing was the storage…can I store it safely…where there are layers of insurance.”

2. “We’re embracing the volatility. Remember, volatility may not be a measurement of risk if you understand fundamentally what you own. You can use the volatility and the manic depression of the market to take advantage of the markets.”

3. “If you’re going from $4.5 trillion of dollar volume to $7.5 trillion of dollar volume…you just got taxed, ladies and gentleman. You know, the government didn’t impose it on you, but they secretly did it through the central bank…your purchasing power has eroded.”

4. “My first bitcoin was super hard to buy; that was my story, but once I owned my first bitcoin and I realized what was going on, I’m like ‘oh my god, I don’t own enough of this.’ So every month, I try to buy a little bit more for myself or my family.”

5. “Long-term, there’s no reason why this can’t be a half a million-dollar coin. But I do think you can still get to $100,000 this year just knowing what I know about demand and potential saturation levels. But I do want to emphasize what Cathie said about leverage…I’m going to remind everyone about something Warren Buffet said about leverage. It is a dagger coming out of the steering wheel of your sports car. And you’re traveling down an icy road in the winter, so when you need to hit the brakes, that’s when leverage is going to hurt you the most.”

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Kevin O’Leary says bitcoin is here to stay as an asset class, but the next wave of institutional money won’t come unless miners pivot towards renewable energy

kevin o'leary
  • Kevin O’Leary reiterated his view that bitcoin mining needs to use more renewable energy.
  • The investor said a flood of institutional money will come in once there’s more clarity about bitcoin’s sustainability.
  • Bitcoin miners say they are increasingly moving towards using renewable energy to power rigs.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Kevin O’Leary reiterated his view that bitcoin mining needs to pivot towards more sustainable practices during a Monday webcast at the Consensus by CoinDesk 2021 convention.

Despite bitcoin’s recent sell-off, the Shark Tank investor said that institutional interest is just in it’s early innings, as less than 1% of institutions globally carry cryptocurrency as an asset class. One reason for the relatively slow pace of adoption is that firms have sustainability committees that screen every investment and filter ones that don’t meet ESG standards, he said.

“The fact that they’re going through this process, I consider a very positive sign,” for crypto, O’Leary added.

Now that institutional investors are interested in being exposed to bitcoin, miners must ensure that bitcoin can meet firms’ ESG standards.

Estimates from the University of Cambridge say the total yearly electricity consumption of the Bitcoin network is 113.74 terawatt-hours. It’s a staggering amount, but miners say they are increasingly moving towards using renewable energy to power the Bitcoin network.

O’Leary said the number one question he asks a mining project before investing in it is how is the project dealing with ESG.

The Shark Tank investor also suggested there should be a way to “tag” a bitcoin and prove that it came from a sustainable energy source. While this isn’t a practice yet, he claimed the technology was “being worked on,” and when it’s available, a flood of institutional money will come into bitcoin.

“It will be the reason it goes to $100,000, $200,000,” O’Leary said, “That’s not going to happen until institutions start to buy it. So everybody’s got to wake up and realize there’s demand, but it has to be done around ESG concerns.”

Bitcoin sold off last week in part due to a tweet from Elon Musk regarding bitcoin’s energy consumption. On Monday afternoon, the cryptocurrency jumped to just under $40,000 after the Tesla CEO tweeted: “Spoke with North American Bitcoin miners. They committed to publish current & planned renewable usage & to ask miners WW to do so. Potentially promising.”

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Bitcoin plunges as much as 15% after Elon Musk halts Tesla payments – calling the token’s energy use ‘insane’

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Elon Musk has been one of the major drivers of the cryptocurrency boom.

Bitcoin tumbled as much as 15% after Tesla boss Elon Musk said on Wednesday night that the car company would stop accepting payments in the cryptocurrency because of concerns about its environmental impact.

Musk later doubled down on his major U-turn, tweeting a chart showing bitcoin’s energy use and calling it “insane.”

The world’s most-traded cryptocurrency then pared some of its gains and was down 8.7% to $49,758 at 9.30 a.m. ET. Bitcoin remained around 70% higher for the year, but was 22% lower than a record high of close to $65,000 touched in April.

Musk’s announcement shocked the cryptocurrency world. The Tesla founder and chief executive has been one of the biggest advocates of cryptocurrencies, and has previously appeared to dismiss concerns about their energy use.

The revelation that Tesla had bought $1.5 billion of bitcoin and would start accepting payment in the token sent the price soaring 16% in a single day in February and added legitimacy to the asset class.

Yet Musk appeared to have had a change of heart, tweeting a statement on Wednesday night saying: “Tesla has suspended vehicle purchases using Bitcoin.

“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”

Critics have long attacked bitcoin for its energy use. Bitcoin “mining” – the process of securing the network and creating coins using vast amounts of computing power – uses more energy each year than Sweden, according to Cambridge University researchers.

A Bank of America report estimated 73% of bitcoin mining takes place in China, where the majority of energy is generated by coal power.

Musk’s announcement sent other cryptocurrencies tumbling, too. Ether, the second-biggest coin by market size, was down 10.7% in the 24 hours to 9.30 a.m. ET. Dogecoin, XRP and Binance Coin all tumbled.

“Tesla accepting transactions bitcoin was viewed as a major step for the crypto market,” Daniel Ives, an analyst at Wedbush, said in a note.

“Now Tesla’s/Musk reversal will have a short-term negative impact on bitcoin and the crypto landscape as the market digests this confusing news from one of its biggest supporters.”

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Bitcoin plunges as much as 15% after Elon Musk halts Tesla payments, citing climate damage in major U-turn

AP20352554311566
Elon Musk has been a key driver of the cryptocurrency boom.

Bitcoin tumbled as much as 15% on Wednesday night after Elon Musk said his electric car company Tesla would stop accepting payments in the cryptocurrency because of concerns about its environmental impact.

The world’s most-traded cryptocurrency then pared some of its gains and was down 7.3% to $50,534 at 4.20 a.m. ET. Bitcoin remained around 72% higher for the year, but was 22% lower than a record high of close to $65,000 touched in April.

Musk’s announcement shocked the cryptocurrency world. The Tesla founder and chief executive has been one of the biggest advocates of cryptocurrencies, and has previously appeared to dismiss concerns about their energy use.

The revelation that Tesla had bought $1.5 billion of bitcoin and would start accepting payment in the token sent the price soaring 16% in a single day in February and added legitimacy to the asset class.

Yet Musk appeared to have had a change of heart, tweeting a statement on Wednesday night saying: “Tesla has suspended vehicle purchases using Bitcoin.

“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”

Critics have long attacked bitcoin for its energy use. Bitcoin “mining” – the process of securing the network and creating coins using vast amounts of computing power – uses more energy each year than Sweden, according to Cambridge University researchers.

A Bank of America report estimated 73% of bitcoin mining takes place in China, where the majority of energy is generated by coal power.

Musk’s announcement sent other cryptocurrencies tumbling, too. Ether, the second-biggest coin by market size, was down 8.4% in the 24 hours to 4.10 a.m. ET. Dogecoin, XRP and Binance Coin all tumbled.

“For an asset whose price is driven mostly by psychological sentiment and momentum, bitcoin could have a hard time recovering from this and may never revisit [its] recent highs again,” Jesse Cohen, senior analyst at financial platform Investing.com, said.

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