Canadian research firm BCA Research has highlighted several factors that pose long-term threats to the price of bitcoin, including environmental and regulatory concerns.
According to the report, BCA Research believes that the energy-intensive nature of BTC mining and potential regulatory hurdles could hinder bitcoin’s progress to the point that the cryptocurrency may end up “losing most of its value.”
According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), the annual electricity consumption of BTC miners is now equal to Argentina’s annual carbon footprint.
BCA Research’s chief market strategist, Peter Berezin, wrote in a report that the cost and slow transaction speed of BTC make it “unusable as a medium of exchange.” He also warned that environmental funds are likely to avoid partnering with companies that invest in bitcoin.
“Environmental funds will start encouraging the exit from bitcoin, and its price will begin to decline. Stay away from cryptocurrency, ”Berezin writes.
According to the research firm, governments will work against BTC so as not to lose billions of dollars in seigniorage revenues – government profits from the right to minting coins. However, BCA Research’s warning is unlikely to affect the policies of large US-listed companies that have relied on bitcoin in recent months as a way to hedge against inflation and dollar depreciation.
Tesla recently bought BTC for $ 1.5 billion and announced plans to accept payments in cryptocurrencies. In addition, MicroStrategy moved to replenish its cryptocurrency reserves with small amounts, adding another 328 BTC for corrections. The company now owns 90,859 BTC.
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