Bitcoin has surpassed $100,000

Executive Summary

The purpose of this publication is to identify Bitcoin's Various Carbon-Related Challenges, viewed as a means of payment, an investment vehicle, or an asset that influences economic behavior. It is not intended to take a position on this tool or on the debates surrounding it.

The recent surge in the price of Bitcoin, which recently surpassed the symbolic threshold of $100,000/BTC[1], has attracted a great deal of attention and reignited criticism regarding its environmental footprint, due to its rising energy consumption (121 TWh in 2023, according to the Cambridge Bitcoin Electricity Consumption Index (CBECI), which is 0.5% of global electricity generation, or 35% of the United Kingdom’s electricity generation). We will show:

• Unless they account for a significant portion of payments and drastically reduce the carbon intensity associated with securing the network, The carbon footprint per payment remains higher with Bitcoin than with a traditional payment, but this observation must be qualified by the fact that the marginal carbon cost of a transaction is virtually zero

• This metric must be supplemented by others, as Bitcoin is currently viewed less as a payment instrument than as an investment vehicle—or even as a potential store of value.

• That when comparing the carbon footprint per dollar invested in Bitcoin, real estate, a Livret A savings account, and gold, Bitcoin’s performance is lower than that of gold and real estate, but far lower than that of the Livret A savings account today, even when considering the decarbonization of the economy.

• The issue of Bitcoin’s impact on the climate must first and foremost be considered within the context of a broader economic and monetary discussion: Belief in its potential price appreciation may divert a portion of the capital flows that would otherwise be directed toward financing the real economy through increased savings, which is likely to result in two opposing effects: a slowdown in physical flows resulting from reduced consumption in favor of savings, but at the same time, the risk of insufficiently funding the ecological transition effort. This effect is the most significant from a climate perspective.