‘Shark Tank’ star Kevin O’Leary shrugged off government crypto bans and revealed he’ll keep buying the bitcoin dip in an interview. Here are 10 highlights.

kevin o'leary
“Shark Tank” investor, Kevin O’Leary

  • Kevin O’Leary explained why governments won’t be able to put a lid on cryptocurrencies in a recent interview.
  • The “Shark Tank” star spoke about the tipping-point for institutions getting into bitcoin and his involvement in making it ESG-compliant.
  • He shared what would prompt him to bump up his bitcoin allocation to 5%, and outlined what it would take to get a yield off his holding.
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Famed investor Kevin O’Leary called bitcoin the “granddaddy” of digital assets and explained why he thinks governments will be unable to ban cryptocurrencies, speaking in a “Bitcoin Magazine” podcast with hosts David Zell and Matt Odell on Tuesday.

The “Shark Tank” co-host, who is a major shareholder in a new DeFi investing company, also spoke about bitcoin’s move to becoming ESG-friendly and what the tipping point for institutional adoption will be – and how that could help its price eventually skyrocket.

Here are 10 highlights from O’Leary’s interview, lightly edited and condensed for clarity:

1. “I’m never going to sell it, I’m not going to trade it. I’m going to own it, and I anticipate it will appreciate over time and probably beat the S&P 500 index.” – on considering bitcoin as property, not currency.

2. “I’m not going to try and trade in and out of price adjustments. I’m going to allocate 3% – and if the price drops, I’ll buy more. That’s the whole point.” – on bitcoin’s volatility being problematic for institutional investors.

3. “The institutional investor is not on board yet. But my thesis is: when we resolve the issues around bitcoin right now in the next couple of years, and allocation starts happening from sovereign funds and pension plans, you’re gonna see a material appreciation in price.” – on value appreciation over time.

4. “The most desirable asset in crypto is bitcoin – it is the gold standard of crypto.” – on institutions considering allocations to cryptocurrencies.

5. “I don’t see a situation where it’s going to be made illegal anywhere, and the thesis is the genie’s out of the bottle. Bitcoin is distributed all around the world and used as property, and currency, in every country on Earth. And so, I don’t really see, even if one country says they’re going to make it illegal, how they’re exactly going to do that.” – on bitcoin being regulated by governments.

6. “Regulating it out of existence is a low probability as far as I’m concerned. Not going to happen. In fact, it’s going the other way.” – on regulators having to deal with bitcoin’s use.

7. “The world is going to move towards digital currency. Bitcoin was the beginning of that, it is the granddaddy of it all, which is why it’s so desirable.” – on the inevitability of digital currencies being the future.

8. “I have had many discussions with some of the larger players in bitcoin in terms of ownership and assets. And the reason we have a collective interest in it is that we see the logjam being broken up, and then institutions coming into an asset class we already are positioned it – that’s a very attractive outcome.” – on being involved in bitcoin’s move to becoming ESG-friendly.

9. “I’m looking at increasing my allocation. Next stop will be 5% on bitcoin (from 3%) and at the same time investing in infrastructure so that I can actually do the same thing that anybody else wants to. I would like to actually make yield off my coin, and that involves getting a platform that allows me to do that easily, compliantly with tax reporting.” – on his investment in institutional tax-compliant platforms for bitcoin that are just starting up.

10. “Bitcoin is volatile. There’s no question about it. But I think everyday we move towards more adoption at the institutional level. But there’s going to be the proverbial tipping point when all of a sudden one or two or three large institutions do an allocation, and you’re going to see the price of bitcoin skyrocket.” – on the digital asset overcoming ESG hurdles.

Read More: A managing partner at a venture fund that’s backed more than 30 billion-dollar blockchain projects compares the technology today to the dot-com boom of the 1990s – and breaks down 4 platform types and the cryptos leading each one into the future

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Billionaire investor Bill Ackman helped pressure Pornhub into taking down millions of unauthorized videos, report says

bill ackman
Bill Ackman.

  • Bill Ackman helped to pressure Pornhub into purging unauthorized videos.
  • Ackman texted then-Mastercard CEO Ajay Banga about the issue, Institutional Investor reported.
  • Mastercard and Visa swiftly cut ties with Pornhub, and the site deleted 80% of its videos.
  • See more stories on Insider’s business page.

Billionaire investor Bill Ackman helped to pressure Pornhub into removing millions of unauthorized videos from its website, Institutional Investor reported this week.

The Pershing Square Capital Management boss was browsing Twitter last December when he came across “The Children of Pornhub,” a damning indictment of the porn site by The New York Times columnist Nicholas Kristof. The article detailed how Pornhub allowed unverified users to upload videos without authorization from the people featured in them, enabling revenge porn and other exploitation.

Ackman noted in Kristof’s story that Mastercard and Visa processed payments for Pornhub. The hedge fund manager, who has waged activist-shareholder campaigns against several companies, realized he could leverage his influence to push those publicly listed payment groups to make changes.

Unaware that American Express already banned payments on porn sites, he texted Mastercard CEO Ajay Banga a link to the story and the following message: “Amex, VISA and MasterCard should immediately withhold payments or withdraw until this is fixed. PayPal has already done so.”

Banga swiftly replied, “We’re on it,” according to Institutional Investor.

Days later, Mastercard announced it had instructed its partners who connected Pornhub to its payment network to cease accepting the site’s charges. The payments group had found evidence of illegal activity and was continuing its investigation, it said.

Visa promptly cut ties with Pornhub too and launched an investigation. The porn site declared less than 24 hours later that it had removed 10 million videos, or 80% of all the videos on its site.

MindGeek didn’t immediately respond to a request for comment from Insider.

Pornhub-owner MindGeek was already under pressure from human rights activists such as Laila Mickelwait, while litigator Michael Bowe was signaling to the credit-card companies that lawsuits might be on the way, Institutional Investor said.

However, Ackman’s text to Banga and his tweets about the issue may have tipped the balance. “It wasn’t until Bill really laid on the pressure and said, ‘Do the right thing,’ that they did,” Mickelwait told the publication.

The billionaire’s key takeaway from the episode was that investors can influence companies to act more responsibly, especially now that environmental, social, and governance (ESG) standards are gaining momentum. “CEOs get a zillion emails, but the one group that rises to the top of the line … is its biggest shareholders, influential shareholders,” he told Institutional Investor.

“A tweet can move the needle,” he added.

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The three dimensions of investing today are risk, return, and impact. Experts say investors concerned about ESG need to ‘do their homework’

"Future of Finance," an Insider virtual event, was presented on June 8, 2021.
“Future of Finance,” an Insider virtual event, was presented on June 8, 2021.

  • When it comes to data on sustainable investing, asking the right questions is key.
  • Execs from Bridgewater and LGIM outlined policies that could encourage better ESG disclosure.
  • The conversation was part of Insider’s virtual event, “Future of Finance,” presented by Grayscale on June 8, 2021.
  • See more stories on Insider’s business page.

As financial institutions grapple with the steep risks posed by the imminent global climate crisis, ESG (environmental, social, and governance) investing has emerged as a potential solution. While these sustainable investment strategies have gained popularity with investors, data and reporting surrounding ESG factors can be opaque and confusing.

Karen Karniol-Tambour, co-chief investment officer for sustainability at Bridgewater Associates, the world’s largest hedge fund, said that sorting through that data and making sense of it is part of an investor’s job. She said answering questions about an investment’s sustainability merits may feel like a new challenge, but is not any different than answering familiar macroeconomic questions about a country’s growth rate, for example.

Karniol-Tambour made these comments during Insider’s recent virtual event, “Future of Finance,” presented by Grayscale, which took place on June 8, 2021.

This panel, titled “Sustainable Investing Pays Off?” was moderated by Bradley Saacks, senior finance reporter at Insider, and featured Karniol-Tambour along with John Hoeppner, head of US stewardship and sustainable investments at Legal & General Investment Management (LGIM) America, a division of the $1 trillion global asset manager.

Karniol-Tambour said that the key question for Bridgewater in evaluating ESG investments is what they are trying to get out of the data.

“Don’t think about what is presented to you, but [think about] what concept are you actually trying to capture,” Karniol-Tambour said.

Hoeppner said in analyzing sustainable investments, LGIM is trying to “create [its] own points of view and rely less on others.”

The firm has two key goals in mind when it looks to ESG investing, Hoeppner said. The first is to raise standards across the board with regard to disclosure and the second is to find an investment advantage by looking at subsets of ESG data that are closely linked to mispricings in the market.

Karniol-Tambour said her clients want to make the highest returns with the lowest risk possible. She said that there are many areas in which ESG factors are material to making money in a particular market.

“For example, if we’re going and deciding whether or not we think the price of copper is going to go up or down, you really just can’t do that analysis without looking at what’s the pace going to be in which it will transition away from carbon,” Karniol-Tambour said.

“Investing is not two-dimensional risk and return. It’s actually three-dimensional risk, return, and impact -or risk, return, and sustainability. And that third dimension, deserves just as much care, attention, analysis, customization.”

Multiple strategies are available to investors seeking to maximize impact. Hoeppner said that divestment, or opting out of investing in certain assets because they are not sustainable, is “overused” as a strategy. He said that LGIM, as a major investor in many public companies, prefers to use its access to have “constructive engagements” with their portfolio companies through discussions and proxy votes on how to navigate risk.

Moderator Bradley Saacks asked the panelists about the regulatory environment for ESG investing. Hoeppner mentioned that in the US today, if you are participating in a 401k or pension as part of your corporation, it is legally unclear whether or not you can have a sustainability fund in your lineup.

He said he is optimistic that regulators will sort out the issue, which he attributed to an “incorrect assumption” that ESG strategies were deployed for non-financial benefits, whereas he believes most ESG research is actually performed with the goal of reaping financial benefits.

He also expressed the hope that the Securities and Exchange Commission (SEC) enforces some sort of mandatory disclosure for climate risk for all companies, arguing that information is the basis for a free market.

Karniol-Tambour pointed to Australia’s policy of making companies report their potential exposure to modern slavery and eradicate it as an example of sound policy based on a robust data ecosystem.

Without disclosures and data, Hoeppner said, it is difficult to discern companies’ credibility on ESG issues.

“All investment managers see ESG and sustainable investing as a commercial opportunity,” Hoeppner said.

“How do you tell one asset manager from another one when everyone says that they have the best sustainability credentials? The hard answer is that you have to do your homework.”

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Fundstrat’s Tom Lee explains why he’s doubling down on bitcoin after Elon Musk’s surprising reversal – and increasing his price target to $125,000

Tom Lee Fundstrat
  • Fundstrat’s Tom Lee is confident that bitcoin bulls won’t change their tune on the cryptocurrency following Elon Musk’s abrupt reversal.
  • Lee upgraded his bitcoin price target from $100,000 to $125,000 by year-end.
  • He said it is possible Musk had to consider investors’ ESG concerns over bitcoin.
  • See more stories on Insider’s business page.

Fundstrat Global Advisors managing partner Tom Lee is confident that bitcoin will continue to rally in the wake of Elon Musk’s abrupt reversal Wednesday on allowing Tesla to accept the cryptocurrency as payment.

“I don’t think it’s going to get people negative on bitcoin, but it is going to get people to focus on the problems that are being created by digital assets,” he told Insider. “It is probably better to view it as a call to action for the bitcoin industry to focus on renewables or more efficient ways to provide proof of work.”

On May 12, the Tesla CEO suspended vehicle purchases made using bitcoin, citing environmental reasons. The announcement sent shockwaves across the digital asset ecosystem.

Following the news, bitcoin plunged nearly 15%. Other digital assets such as ether and XRP, as well as cryptocurrency-linked stocks including Coinbase, MicroStrategy, and Square, all sank as well.

Yet, Lee is confident enough that market will move past Musk’s flip-flopping that he has upgraded his bitcoin price outlook from $100,000 to $125,000 for 2021.

Lee, who is the head of research at Fundstrat, said he understands Musk’s decision to suspend bitcoin payments.

“I imagine it would have been tough to accept bitcoin as payment because of the volatility,” he told Insider. “So as a practical, treasury matter, unless Tesla is hedging the bitcoin transaction at the time of purchase, I don’t know if it’s great from a company perspective.”

He added that the ideal way to use bitcoin would be if Tesla transacted the same day, rather than allowing customers to pay first and get the car at a later time, at which point bitcoin may be worth less.

As for the burning question of why Musk made the decision now, Lee said it is possible it was influenced by people within the organization.

“Many people come to Tesla because it’s ESG-friendly,” he said, referring to environmental, social, and governance metrics closely tracked by many investors.

“I think some of these same people might’ve just questioned, well, if you want to accept a digital currency…maybe it shouldn’t be bitcoin,” he said.

Concerns around bitcoin’s energy consumption have hounded the world’s most valuable cryptocurrency. To verify transactions, thousands of computers must be powered, a process that relies on huge amounts of electricity, which critics say comes mostly from fossil fuel sources.

Other potentially more energy-efficient options include Chia, a new greener cryptocurrency, and Ripple’s XRP, said to be the least environmentally damaging among crypto coins.

Read more: ‘Wolf of All Streets’ crypto trader Scott Melker breaks down his strategy for making money using ‘HODLing’ and 100-times trade opportunities – and shares 5 under-the-radar tokens he thinks could explode

Musk himself though may be leaning towards dogecoin. On Thursday, the Tesla chief said he is “working with Doge devs to improve system transaction efficiency.”

Where bitcoin needs to consume about 707-kilowatt hours for each transaction, dogecoin only requires about 0.12, as the meme token uses fewer calculations to mine and trade coins.

Still, Lee doubled down on the merits of bitcoin, highlighting how the bitcoin system never had a single fraudulent entry in its entire history since it was founded in 2009.

Lee said he’s undeterred by bitcoin’s waning market dominance as the token’s market capitalization falls below 50% of the entire crypto market.

“Bitcoin dominance will actually grow during a bear market,” he said.

Read the original article on Business Insider

Crypto bulls challenge Elon Musk’s environmental concerns on bitcoin – but billionaire Mike Novogratz takes a softer stance

Elon Musk
Tesla CEO, Elon Musk.

The crypto community was swift to reject Elon Musk’s decision late on Wednesday to halt payment in bitcoin for Tesla vehicles due to environmental concerns, suggesting that renewable energy is largely used to mine the popular cryptocurrency.

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

Here’s how some bitcoin bulls reacted to Musk’s announcement:

“Ironic because no incremental energy is used in a #bitcoin transaction. The energy is used to secure the crypto-asset network, and the net impact on fossil fuel consumption over time will be negative, all things considered.” – MicroStrategy CEO Michael Saylor.

“Elon probably did not research how much energy is required to run other (non crypto) currencies that Tesla accepts.” – Binance CEO Changpeng Zhao.

“Elon … you realize that 75% of miners use renewable energy, right? This energy story has been debunked over and over again.” – Morgan Creek Digital co-founder Anthony Pompliano.

“When Elon realizes that bitcoin mining is actually pushing the renewable energy industry forward, he will refresh position and #bitcoin will moon.” – co-founder and president at crypto exchange Gemini Cameron Winklevoss.

“FWIW, Bitcoin mining is a massive subsidy for renewable energy.” – co-founder and CEO at Gemini Tyler Winklevoss.

“We at Mavs.com will continue to accept BTC/Eth/Doge because we know that replacing gold as a store of value will help the environment and shrinking big bank and coin usage will benefit society and the environment.” – Dallas Mavericks owner and investor Mark Cuban.

Novogratz and El-Erian were less at odds with Musk:

“My take on @elonmusk is to take him at his word. He cares about the environment and he is using his considerable influence to push BTC mining towards a greener future. Lots of companies in the space have already been working on this. Stay tuned. And buy $BTC.” – Galaxy Digital CEO Mike Novogratz.

“This unexpected development has placed pressure on #Bitcoin. @elonmusk and @Tesla were front runners in the process of private sector adoption of the #crypto #currency, opening the way for others to follow. The reasons for this apparent U-turn are not yet clear.” – Allianz chief economist and president of Queens’ College, Cambridge University Mohamed El-Erian.

Musk appears to have changed his stance

The self-proclaimed “Technoking” had only recently agreed with Twitter boss Jack Dorsey by saying bitcoin “incentivizes” renewable energy. Dorsey’s Square payments company and Cathie Wood’s Ark Invest asset management firm had collaborated on research that suggested bitcoin mining isn’t environmentally-damaging.

Screenshot 2021 05 13 at 08.34.00

He now says Tesla will look at using other cryptocurrencies that take up less than 1% of bitcoin’s energy use for transactions.

Bitcoin dropped as much as 15% at one point following Musk’s tweet to trade around $46,350, but recovered to around $50,850 as of 3:45 a.m. ET on Thursday.

“In some capacity, distancing the brand from bitcoin could win some ESG love,” Chris Weston, head of research at Pepperstone Financial, said.

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Renewable energy sources grew at their fastest rate since 1999 last year when COVID-19 struck, the IEA says

Wind farm denmark
A working ship stands on stilts between wind turbines erected in the Baltic Sea between the islands of Rügen and Bornholm (Denmark). In the foreground is the “Arkona” wind farm about 35 kilometers northeast of Rügen with a capacity of 385 megawatts. In the background the offshore wind turbines of the Baltic Sea wind farm “Wikinger” of the energy supplier Iberdrola.

  • Renewable energy capacity increased by 45% in 2020 the International Energy Agency said.
  • The IEA predicts that renewable energy sources will cover 90% of global power expansion in the next two years.
  • Demand for renewable energy increased during the pandemic, whilst use of other energy sources declined.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Renewable energy sources increased by 45% in 2020, accelerating at their fastest rate since 1999, as demand for clean power grew during the COVID-19 pandemic, the International Energy Agency said in a report on Tuesday. Wind energy led the expansion, as global capacity increased by 90%. Solar energy capacity grew by 23%.

The IEA links this increase in renewable energy capabilities to global policy decisions and deadlines that countries had set themselves in terms of expanding their renewables sectors. China, the US and Vietnam are credited with leading the renewables push after momentum slowed when the pandemic first hit.

“Overall, IEA quarterly deployment estimates indicate that the slowdown in renewable capacity additions was limited to Q1 2020 only, mainly in China, while construction activity continued strongly in the rest of the world despite continuous movement restrictions and supply chain delays,” the agency said in the report.

Energy markets were hit hard during the COVID-19 pandemic, which saw travel come to a halt, as lockdown restrictions forced people to stay at home. Oil prices fell and turned negative for the first time in early 2020, as demand for the fuel vanished. Crude has since recovered, as investors anticipate economies reopening.

The decline in fossil fuel use also affected biofuel demand, the IEA said. Production fell by 8% in 2020, but still exceeded expectations – 150 billion liters of biofuel were needed in 2020 vs the 144 billion the IEA had predicted. The agency expects demand to rebound in 2021 and grow by a further 7% in 2022.

Looking ahead, the IEA predicts renewable energy sources will be responsible for 90% of global power expansion in 2021 and 2022. The agency expects solar and hydrogen power to play key roles, while the growth of wind power is set to slow down after its surge in 2020.

“The acceleration of hydropower additions through 2022 is driven by the commissioning of mega-scale projects in China. Meanwhile, expansion in other renewables, led by bioenergy, remains stable and represents 3% of total new renewable capacity additions,” the IEA said.

China had already been the driving force of renewable energy expansion in 2020, accounting for half of the new capacity installations and is expected to keep this leadership position, the IEA said.

Despite President Joe Biden’s recent infrastructure plans, Europe is set to replace the US as the second-largest renewable market in 2021 thanks to national policies on climate change and deadlines that are looming. Biden’s infrastructure spending may not take effect until later this decade, the IEA said.

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As ESG investment and goals expand and the sector evolves, expectations grow for more accountability and data

US envoy for climate John Kerry, US Secretary of State Antony Blinken, and US President Joe Biden listen as United Nations Secretary General Antonio Guterres speaks on screen during a climate change virtual summit on April 22, 2021, in Washington, DC
US envoy for climate John Kerry, US Secretary of State Antony Blinken, and US President Joe Biden listen as UN Secretary General Antonio Guterres speaks on screen during a climate change virtual summit on April 22, 2021, in Washington, DC

  • Insider polled 614 business decision-makers in 7 countries about investment in innovation, ESG, and purpose.
  • A majority of respondents reported that their companies have ESG policies as well as specific goals.
  • Companies are learning how to measure ESG performance, as investors look for consistent, reliable data and analysis.
  • Visit Insider’s Transforming Business homepage for more stories.

Companies are increasingly setting environmental, social, and governance (ESG) goals, as systems to measure the impact of ESG initiatives are evolving to meet the moment.

The momentum could be a driver of new areas of business transformation, particularly if companies focus on outcomes in diversity, equity, and inclusion (DEI).

The increased focus on ESG is unmissable. During a Transforming Business roundtable in December, Insider asked the panel about a reported surge in demand for ESG investing, fueled at least in part by the pandemic.

“Millennials are value-led investors – and they’re getting older and they’re getting wealthier,” said Edward Lees, a senior portfolio manager at BNP Paribas Asset Management, and a 2020 Transformer. “So this whole demographic of up-and-coming, value-led, climate-conscious people is being joined at the same time with an explosion of democratizing investment products where you can go on your mobile phone and pick a theme and press a button.”

The focus on ESG goes beyond individual millennial investors, however, as fund managers and insititutional investors are under increasing pressure to include ESG offerings for their clients and to supplement their own holdings.

A recent Transforming Business poll* of 614 business decision-makers showed that 60% of respondents their company had set formal ESG goals. Greenhouse gas emissions topped the goals set, followed by water consumption and carbon offsets. Equity and social justice, and diversity and inclusion were also among the higher priorities.

Measurement and accountability

The pressure is on to quantify ESG investment and outcomes, including at the US government level where newly confirmed SEC chairman, Gary Gensler, is expected to focus on ESG reporting. President Joe Biden’s Leaders Summit on Climate solidified this administration’s commitment to tackle global warming.

In February, Allison Herren Lee, at that time the acting chair of the SEC, released a statement signaling the admistration’s increased focus on these initiatives. “Now more than ever, investors are considering climate-related issues when making their investment decisions,” her statement read. “It is our responsibility to ensure that they have access to material information when planning for their financial future.”

In September, the World Economic Forum (WEF) and the International Business Council (IBC) partnered with major accounting firms to create the reporting framework of 21 ESG standards, and more than 60 companies have agreed to adopt the framework.

The greater the accountability from companies, the greater the potential rewards, as investor appetite for these products grows. “The truth is, being an ESG leader does not guarantee your financial and business success, says Martin Whittaker, CEO of JUST Capital. “It’s way more complicated than that. You have to be able to assess what are companies really doing across environmental, social, and governance issues, how does that really relate to company’s short term accounting and financial performance, and how can i use that as an investor?

ESG, DEI, and business transformation

As companies race to implement ESG goals and operations, progress in these areas may drive new levels of business transformation. Diversity, equity, and inclusion (DEI), which are core tenants in the “social” portion of the ESG framework, is a crucial factor for driving products and programs that fuel innovation.

“The process of innovation as it happens within companies, and the beneficiaries of innovation, i.e. the customer, are all wrapped up in the “S” of ESG,” Whittaker said. “Knowing your customer, knowing your supply chain, what your customer wants and how you are meeting those needs – all that requires a diversity of perspectives and backgrounds, and requires companies to rethink how they do that.”

“Your progress towards innovation could be stifled if you’re not pursuing a DEI strategy,” he said.

*This SurveyMonkey Audience poll targeted individuals who work in a management capacity at their company according to the Audience panel. They included respondents from Hong Kong (n=50), Singapore (n=50), The United States (n=207), Canada (n=104), France (n=52), the United Kingdom (n=51), Germany (n=50) and India (n=50), with local translations in Germany and France. Respondents are incentivized to complete surveys through charitable contributions. Generally speaking, digital polling tends to skew toward people with access to the internet. SurveyMonkey Audience doesn’t try to weight its sample based on race or income. Polling data collected total of 614 respondents March 3-4, 2021.

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Copper is ‘the new oil’ and could reach $15,000 by 2025 as the world transitions to clean energy, Goldman Sachs says

GettyImages 667308472
A worker inspects batches of processed copper at Mutanda Mining Sarl, Democratic Republic of the Congo

Copper will be crucial in achieving decarbonization and replacing oil with renewable energy sources, and right now, the market is facing a supply crunch that could boost the price by more than 60% in four years, Goldman Sachs said in a report on Tuesday.

Increased demand and likely low supply are set to drive up the price from the current levels of around $9,000 per ton to $15,000 per ton by 2025, the bank said.

As a cost-effective metal, copper is majorly important in the process of creating, storing and distributing clean energy from the wind, sun and geothermal sources as it has the physical attributes needed to do so, Goldman’s team of analysts, led by Jeff Currie, said in a report titled “Copper is the new oil”.

“Discussions of peak oil demand overlook the fact that without a surge in the use of copper and other key metals, the substitution of renewables for oil will not happen,’ the report said.

Copper will be needed to create the new infrastructure systems required for clean energy to replace oil and gas, however there has not been enough of a focus on this so far according to the report.

Demand will therefore significantly increase, by up to 900% to 8.7 million tons by 2030, if green technologies are adopted en masse, the bank estimates. Should this process be slower, demand will still surge to 5.4 million tons, or by almost 600%.

Copper is a key part of sustainable technologies, including electric vehicle batteries and deriving clean energy. As the deadline of the Paris Agreement comes closer, political and economic pushes towards renewable energy and green technology are becoming stronger.

Just two weeks ago, US President Biden announced an infrastructure package worth $2 trillion, which specifically encourages new sustainable technologies and infrastructure projects.

In its current state however, the copper market is not prepared for the increased demand, Goldman Sachs argue. The copper price has risen by about 80% in the last 12 months, but there hasn’t been a matching rise in output.

“The market is already tight as pandemic stimulus (particularly in China) have supported a resurgence in demand, set against stagnant supply conditions,” Goldman said.

The benchmark three-month copper futures price on the London Metal Exchange was last up 1.4% at around $9,022 a ton, while NYMEX copper futures were up 1.5% at $4.09 a pound.

As the expansion of mines and creation of new copper production fields takes years, this is likely to lead to shortages of the metal. To prevent a depletion of copper supply within two years, prices must rise now to encourage investment and an expansion in output, Goldman said.

At present, Goldman Sachs “now estimate a long-term supply gap of 8.2 million tons by 2030, twice the size of the gap that triggered the bull market in copper in the early 2000s”.

Copper production declined in 2020 due to government restrictions and lockdowns during the Covid-19 pandemic. The world’s largest copper producers, Chile and Peru, were hit especially hard by the pandemic, which could impact supply until 2023, according to commodity analysts S&P Global. Last week, prices spiked following Chilean border closures related to the pandemic.

Global copper production is however predicted to increase by 5.6% in 2021 after declining by 2.6% in 2020, according to a GlobalData report published in February.

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Green stocks have got caught up in the tech sell-off. But it’s just a dip, as climate investing is set to power ahead under Biden, according to JPMorgan

President Joe Biden has pledged to tackle climate change

  • Investors may have become overexcited with some green stocks, JPMorgan’s European heads of ESG research said.
  • Yet green investing is only just getting started, they said, as Joe Biden and others focus on the climate.
  • The research chiefs said the US is unlikely to let the EU be the standard-setter on green investing.
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Green stocks have sold off quite aggressively this month, but fears of a bubble are overblown and a new climate focus from Joe Biden and other governments means environmental investing is only just getting going, JPMorgan’s co-heads of ESG research for Europe have said.

Jean-Xavier Hecker and Hugo Dubourg told Insider the Biden-Harris green stimulus plans, China’s sustainability push and Europe’s new environmental investing rules would all boost the market and create new opportunities.

The recent stock-market volatility – triggered by rising bond yields – has hit green stocks, such as those in renewable energy and electric vehicles, along with tech, after these sectors last year.

The iShares clean energy exchange-traded fund was down 12% in the month to Friday according to Bloomberg data, for example, while the S&P sustainability index has underperformed the wider market. Electric vehicle stocks such as Tesla and Nio have fallen sharply too. The S&P 500, meanwhile, has gained over 3% so far in March.

But Dubourg said: “The stocks that have tumbled are largely solar and EVs, where the valuations exploded at the end of last year. So it’s not really ESG investing overall which has been questioned.”

He said the market is “not being nuanced enough” in its approach to environmental, social and governance investing.

Hecker said investors had focused on the “simplistic trade” in recent months, bidding up green favorites. Tesla is a prime example, rising more than 500% over the last year, but falling around 7% in the month to Friday. Yet the market should “not be too concerned about green bubbles,” he said.

“The climate ambitions of the Green Deal in Europe, of the Biden-Harris platform in the US, of China with its 2060 carbon-neutrality ambition will be much more transformative,” he said. The Biden administration’s advisors are hoping to spend around $3 trillion, with climate change a key focus.

Hecker added that the Biden administration is likely to boost green investing as it tries to match Europe’s advancements on ESG rules. “There is no way the US is going to let Europe be the standard setter on ESG,” he said.

Europe introduced new reporting rules for companies earlier in March that aim to help investors work out which assets really are green. It is part of a wider push by the European Union to set standards for climate-conscious investing.

Green investing had a bumper year in 2020, despite the coronavirus crisis. Goldman Sachs analysts said in a note ESG equity and fixed income funds attracted record inflows in Europe and the US last year, at 184 billion euros ($216 billion) and $50 billion, respectively.

Yet there are growing concerns that the craze for green investing is not as climate-friendly as it makes out. A report from a group of global campaign organizations on Wednesday that the world’s biggest banks, including JPMorgan, have invested $3.8 trillion in fossil fuel firms since the Paris climate agreement was signed in 2016.

A separate report released on Monday by the Climate Action 100+ investor group, which collectively managed $54 trillion, found companies were so far badly failing to live up to their climate pledges.

Mindy Lubber, Ceres CEO and Climate Action 100+ committee member said there is an “urgent need for greater corporate action and higher ambition.”

Hecker and Dubourg – who work independently of JPMorgan’s banking operations – said that although some companies could do more, it will take a while for the effects of commitments to be seen. They said Europe’s new rules were a positive step in this regard, as they provide clear benchmarks for firms to be measured against.

As governments increasingly focus on climate change, new opportunities will crop up in sustainable investing, they said. For example, the Biden administration’s climate plans are likely to extend, or increase tax credits for renewables and support carbon-capture technology.

Hecker said carbon capture is “something which at some point is going to take off because it will be needed as part of the mix… to deliver on the Paris agreement goals.”

The JPMorgan ESG research chiefs said tackling climate change would require even major polluters to change their ways and become much more environmentally friendly.

“There will be no such thing as these stocks increasing by 4,000% again,” Hecker said. “Now you need to be looking for relative winners and differentiated business models.”

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Bitcoin uses more energy than American Airlines and each $1 billion in inflows is equal to owning 1.2 million cars, Bank of America says

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The bitcoin price has soared in 2021

  • Bank of America research shows bitcoin’s immense environmental footprint.
  • It is one one of the biggest carbon-emitting sectors, on a par with huge firms and even the US federal government.
  • Other less climate-related concerns include use of bitcoin in cybercrime such as money laundering.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin’s energy consumption is comparable to that of major corporations like American Airlines, which flies over 200 million passengers a year, and even the entire US federal government, which employs 2 million people, according to research on Wby Bank of America.

Each $1 billion in inflows into bitcoin uses the same amount of energy as 1.2 million cars, estimates the report. “Looked at differently, a single Bitcoin purchase at a price of ~$50,000 has a carbon footprint of 270 tons, the equivalent of 60 ICE cars,” Bank of America said in a note published on Wednesday.

Bitcoin’s carbon footprint is directly linked to the price. As the price goes up, so do the resulting emissions, as more crypto miners become involved. In turn, the bitcoin network has to become more complex to cope with the demand and prevent hacking. This then requires more hash power, which drives up energy consumption, the bank said.

“Given the relatively linear relationship between bitcoin prices and bitcoin energy use, it is perhaps no surprise that bitcoin’s estimated energy consumption has grown over 200% in the past two years,” Bank of America said.

Bitcoin uses as much power as a small, developed country like Greece, which has a population of over 10 million people, at a time where most companies and countries are focused on lowering their environmental impact, the bank said.

“Another key concern is that most hash power comes from China, where the government actively encourages bitcoin mining and where electricity costs are very low.

“Nearly 60% of Chinese electrical generation is from coal fired power plants, with less than 20% coming from natural gas or renewables,” Bank of America said. This means most bitcoin mining is fueled by unsustainable fossil fuels.”

Other crypto currencies including Ethereum’s ether token are only slightly less impactful on the environment, the report said. However, the digital currencies proposed by central banks would not have the same negative impact, it added.

Beside the environmental impact, the report also discusses social and governance risks associated with investing in bitcoin, which Bank of America says should not be underestimated.

Democratisation and decentralisation of money have value, “But negatives outweigh. Anonymity aids nefarious activities,” it said.

US Treasury Secretary Janet Yellen has said on numerous occasions one of her concerns around cryptocurrencies is their use in criminal online activity, including money laundering.

The report also provides a wider assessment of Bitcoin, coming to the conclusion that the main reason for investing into Bitcoin is its price appreciation – rather than inflation protection or diversification.

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