A portfolio manager at one of London’s leading hedge funds has warned that bitcoin, probably the best known cryptocurrency, has no real social utility other than as a tool for speculation and a means to launder the proceeds of crime.
Tim Bond, partner and portfolio manager at Odey Asset Management, also told MarketWatch it was damaging the planet: “To my mind, bitcoin is a particularly vile asset class.
“If bitcoin starts to displace fiat currencies [government-issued currency that is not backed by a commodity], governments’ ability to tax, spend and redistribute will be severely impaired.”
Read: Reduced dividends, softer growth and an economy haunted by zombie companies — that’s the post-pandemic future seen by this Odey fund manager
He believes bitcoin could prevent society from functioning in an efficient and ethical manner.
“In this sense, bitcoin is the spearhead of a particularly extreme form of libertarian anarchism, which is presumably why it is so popular in Silicon Valley,” he said.
Odey Asset Management, which has over $3 billion funds under management, was established in 1991 by billionaire Crispin Odey. Bond said neither he nor it has a holding in bitcoin.
Bitcoin mining is a form of auditing or record-keeping that uses computer processing power. Bond cited a Cambridge University Centre for Alternative Finance calculation that bitcoin mining consumes an annual 118.17 TWh of electricity a year.
Read: Bitcoin Is Hitting the Mainstream Even as Its Environmental Toll Mounts
“Bitcoin mining mostly takes place in Asian economies (65% in China) where the electricity supply is from coal and other fossil fuels,” he said. “We can therefore calculate that bitcoin mining produces around 55 million metric tons of CO2 [carbon dioxide] a year, equivalent to the annual CO2 emissions of Finland and more than the emissions of countries such as Denmark, Sweden and Norway.
“Bitcoin has therefore added CO2 emissions equivalent to the annual output of a medium-sized advanced economy. And as the bitcoin price rallies, so the mining activity will intensify, producing even higher levels of CO2 emissions.
“It is difficult to think of any other human activity that is simultaneously quite so pointless and quite so damaging to the planet.”
Read: Electricity to power bitcoin surges to new heights as price gets Tesla boost
Last month, electric-car maker Tesla
TSLA,
posted a Securities and Exchange Commission filing giving details that it had spent $1.5 billion on bitcoin.
Read more:Bitcoin could prevent society from functioning and is an ‘extreme form of libertarian
