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- Elon Musk's concern about bitcoin's energy consumption is "misguided," Ark Invest said in a Monday note.
- Musk raised concerns about bitcoin's energy consumption being derived from sources like coal over the weekend.
- Bitcoin has fallen 19% since Musk said Tesla would no longer accept bitcoin as a form of payment.
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Elon Musk's concern that bitcoin primarily relies on fossil fuels for its energy needs is "misguided," Ark Invest analyst Yassine Elmandjra said in a Monday note.
Musk had caused a stir in the cryptocurrency space over the past week, beginning with his announcement that Tesla would no longer be accepting bitcoin as a form of payment, and ending with a weekend tweet-spree that cast doubt over his bullishness on the cryptocurrency.
Since then, bitcoin fell to a new cycle low of $42,000, and is down 32% from its record high. The cryptocurrency did stage a brief bounce after Musk clarified that Tesla had not sold its more than $1 billion bitcoin position it bought in January.
But Ark Invest believes bitcoin can accelerate a green-energy revolution and become "a net positive for the environment," the note said.
Bitcoin mining "could impact the amount of renewable energy provisioned to the grid by transforming intermittent power resources into baseload generation by way of energy storage... renewables would be able to satisfy only 40% of the grid's needs in the absence of Bitcoin mining but 99% with the commercial 'subsidies' associated with Bitcoin mining," Elmandjra explained.
The analysis echoes a whitepaper published by ARK Invest and Square last month, that suggested renewable energy adoption would increase because of bitcoin mining.
That analysis prompted Musk to reply "True," which is why his recent about-face on bitcoin's energy consumption concerns caught many by surprise.
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