Kevin O’Leary: Capital Is Flowing Into A Specific Crypto Sector
According to Shark Tank star Kevin O’Leary environmental concerns on crypto mining are moving capital flows into a specific section in crypto space.
In a recent video update to O’Leary’s YouTube channel, pointed out that mining companies have started to buy carbon credits, but actually in the long run this is not a viable solution.
“As the pressure came on for ESG mandates, they started buying carbon credits. That’s not going to work because you’re going to start to see in this year, I’m speculating, that these large institutions are going to start demanding carbon credit audits, and you don’t want to be in a company stock that has the risk of a carbon audit because the truth is it’s almost virtually impossible to show and understand the tracking error of a carbon credit versus what you’re actually burning in carbon.”
According to the businessman, investors are moving to invest in mining firms that are plugging in on green energy sources. This investment strategy lowers the regulatory risk of getting slapped with a carbon audit, he explains.
“So all of the money is quietly moving right now to new mining companies, most of them private, that are going to use hydro, wind, solar and nuclear power because if you use any of those options for mining, there is no carbon audit. There is no offset necessary. You’re not burning carbon.”
O’Leary has invested in a crypto mining firm in Norway, which according to him has institutional backing mainly due to efficient use of green energy.
Institutional investors are find of owning shares of these companies, as it means that they also indirectly hold coins that they know are ethically mined, O’Leary said.
“We have power at less than two cents a kilowatt-hour. Our stacks are remote. We’re using the heat that’s generated there for hydroponics and fish rookeries, and the stakeholders of that mine are many of the villagers that live there.
Here’s the key to this situation: the institutions that are backing it and some of them are sovereign wealth funds ask me one thing: ‘Are the coins awarded going to stay on the balance sheet of this company? Because we’ll be able to own the stock with the proxy that we know every coin was mined sustainably under an ESG mandate, and that’s how we want to own our Bitcoin. If you’re telling us you’re going to sell off your coin, then we’re not investing.’”
