Canadian research firm BCA Research has identified several factors that pose a long-term threat to the bitcoin price, 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 could eventually ” lose 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.
Peter Berezin, chief market strategist at BCA Research, wrote in a report that the cost and slow transaction speed of BTC make it “unsuitable as a medium of exchange.” He also warned that funds focused on environmental protection are likely to avoid cooperation with companies that invest in bitcoin.
“Environmental funds will start encouraging an exit from bitcoin, and its price will start to decline. Stay away from cryptocurrency, ” writes Berezin.
According to the research firm, governments will work against BTC to avoid losing billions of dollars in revenue from seigniorage – the state’s profit from the right to mint coins. However, the warning from BCA Research is unlikely to affect the policies of large US-listed companies, which in recent months have relied on bitcoin as a way to insure against inflation and the depreciation of the dollar.
Recently, Tesla bought
BTC for $1.5 billion and announced plans to accept payments in cryptocurrencies. In addition, MicroStrategy has moved to replenish cryptocurrency reserves in small amounts, adding
another 328 BTC to the correction. The company now owns 90,859 BTC.