Altcoin investors around the world have been focused on Ethereum (ETH), the second largest cryptocurrency this week. On Thursday morning, Ethereum’s transition to the proof-of-stake (PoS) consensus algorithm was complete. This cleared the way for more investment from ESG-conscious institutional investors. Here are the details…
Transformation of leading altcoin Ethereum attracts ESG-focused institutions
With a market cap of $200 billion, the transformation of the cryptocurrency promises to deliver massive energy efficiency. This makes Ethereum much more cost-effective in terms of energy compared to Bitcoin, the most popular coin on the market. There were concerns about Bitcoin mining, which consumes more than 380 terawatts of electricity per hour, according to Cambridge University estimates. For investors who have expressed their concerns, Ethereum is likely to become a more attractive proposition now.
For example, as we reported on Cryptokoin.com last year, Tesla CEO Elon Musk said that the automaker will stop accepting Bitcoin as a means of payment for its vehicles, citing concerns about the amount of electricity used to mine the coin. On the other hand, in terms of energy efficiency, Web3 Labs CEO and Founder Conor Svensson said:
I believe Ethereum will surpass Bitcoin in the long run. If you’re a company looking to invest in cryptocurrencies, given the ESG narrative, I think many will be a bit hesitant to invest in Bitcoin when there are other assets that don’t use large amounts of power.
Ethereum’s merge journey
A decrease in power consumption per process from about 300 terawatts to less than 0.3 terawatts is expected. This indicates environmental improvement. Another change is due to the reduction to be made in electronic waste. It is estimated that PoW mining in ETH causes up to 16,000 tons of mining items to be discarded annually. According to some studies, this amount will now be reduced to less than 40 tons per year thanks to the transition to Proof-of-Stake.
Meanwhile, the interest in ESG investments, which are made considering the “environmental, social and corporate governance” issues, has increased in traditional finance in recent years. In fact, assets under management of ESG funds are likely to hit $41 trillion by the end of this year, according to a report by Bloomberg on the subject.
On the other hand, the reaction of the market to the “merge” has been pretty quiet until now. In fact, the Ethereum price has lost almost 20 percent on a weekly basis. But behind this is the overall crypto market downturn. Ethereum has also been affected by the price movements of BTC, which has lost 9 percent in the last seven days and fell below $20,000. The value of ETH is at the level of $ 1,434 at the time of writing.
39460
