What Happened: Ark Invest analyst Yassine Elmandjra said in a note Monday that the impact of Bitcoin mining could become a “net positive” to the environment and speed the world’s transition to renewable energy.
The analyst explained that Bitcoin mining could impact the amount of renewable energy provisioned to the grid by transforming intermittent power resources into baseload generation through energy storage.
In the absence of Bitcoin mining, renewables would be able to satisfy only 40% of the grid’s needs. However, 99% of the grid’s requirements could be met by renewables with the commercial “subsidies” associated with Bitcoin mining, according to the analyst.
Why It Matters: The analyst note is a reiteration of Ark Invest’s stance on Bitcoin mining. Last month, Wood’s firm and Jack Dorsey-led Square Inc. (NYSE:SQ) released a whitepaper arguing that Bitcoin mining provides an opportunity to spur the global energy transition to renewables.
The commentary assumes significance as Ark is a major Tesla backer. ARK’s flagship fund — ARK Innovation ETF (NYSE:ARKK) — has Tesla as its largest holding with nearly $2 billion worth of the electric vehicle maker’s stock.
However, Ark’s stance puts in opposition to Musk’s opinion on Bitcoin. Last week, Musk caused a stir in the cryptocurrency market after he announced that Tesla would no longer accept Bitcoin as a form of payment due to environmental concerns.
Bitcoin is down 30.8% from its all-time high of $64,863.10 reached on April 14. However, the apex cryptocurrency is up 1.1% higher over the last 24 hours and is trading at $44,936.74 at press time.
Price Action: Tesla shares closed almost 2.2% lower in Monday’s regular trading session at $576.83 and further declined 0.8% in the after-hours session to $571.94.