Bitcoin mining has grown into a big commercial industry dominated by publicly traded companies that operate large-scale mining facilities that often use as much electricity as a small city. In 2023, Bitcoin mining globally consumed an estimated 121 TWh of electricity, similar to the entire gold mining industry or a mid-sized industrial country like Poland. And with that comes a country-sized carbon footprint. Bitcoin mining companies rely on access to capital markets to build the digital mining facilities and purchase the specialized computer equipment that use all of that electricity, generating large carbon emissions and creating a lifeline for fossil fuels.
Yet, there’s been little scrutiny of how investments from traditional finance companies are enabling Bitcoin mining companies’ carbon-intensive operations, despite the guise of Bitcoin being outside of the mainstream financial system. Banks, asset managers, insurers, venture capital firms, and others need to be held accountable for their support of polluting Bitcoin mining and take responsibility for funding this growing climate threat that is out-of-step with corporate climate goals and net-zero pathways.
Unlike other energy and carbon intensive sectors including oil and gas, neither financial companies nor Bitcoin mining companies are adequately disclosing carbon emissions. Thus, GPUSA, in partnership with leading nonprofit research organizations Profundo and WattTime, developed an innovative approach to estimating Bitcoin mining companies’ electricity use and carbon emissions and then linked those emissions to investing, lending, and underwriting from financial services companies.
We find that the top 5 financiers of carbon pollution from large publicly-traded Bitcoin mining companies in 2022 were Trinity Capital, Stone Ridge Holdings, BlackRock, Vanguard, and MassMutual, accounting for over 1.7 million metric tons CO2—equal to the emissions from over 335,000 American homes using electricity for a year. The top 20 financiers also account for nearly 70% of all financed and facilitated emissions, and include many large, traditional financial services firms who are enabling this polluting and risky industry. Bitcoin mining companies Marathon Digital, Hut 8, Bitfarms, Riot Platforms, and Core Scientific also generated the most carbon emissions in 2022. The emissions caused by their additional energy demand was as much as 11 gas-fired power plants in a year. All 20 publicly-traded Bitcoin mining companies combined generated as much carbon emissions as two coal power plants in a year, over 7.8 million metric tons CO2.
Funding polluting Bitcoin mining companies is out of step with carbon reduction targets and sustainability pledges from financial services companies. Take BlackRock, purportedly a leader in ESG investing, who was responsible for the 3rd most carbon emissions from its investments in Bitcoin miners and had the most among big Wall Street firms. The climate risks from investing in Bitcoin mining companies are not being fully acknowledged which limits the ability of regulators, shareholders, and individual and institutional investors to make informed decisions. It’s time for the energy-intensive Bitcoin mining industry to come out of the shadows and follow the broader business community on climate and sustainability reporting. Our financed and facilitated emissions estimates provide yet another reason for the Bitcoin network to slash its climate impacts by changing Bitcoin to a new low-energy operating system.
