Sovereign Wealth Funds Could Take Bitcoin To $148,000

Summary

In this episode of the Bitcoin layer, host Nick and guest Daniel Baton discuss the environmental impact of Bitcoin mining and the challenges Sovereign Wealth Funds face in investing in Bitcoin due to outdated ESG perceptions. Daniel shares his research on the actual benefits of Bitcoin mining, such as methane mitigation and promotion of renewable energy, and the importance of re-educating institutions about its positive environmental contributions. The conversation highlights the potential for Bitcoin to be a force for environmental repair and the need to update the narrative surrounding its impact.

Takeaways

• 😀 Daniel Batson is an advocate for Bitcoin, focusing on its environmental impact and the misconceptions surrounding Bitcoin mining.
• 🌟 Sovereign wealth funds have a combined $35.7 trillion in assets under management, and a 1% investment in Bitcoin could significantly boost its market cap.
• 💡 Batson's research aims to understand the barriers preventing sovereign wealth funds from investing in Bitcoin, particularly the ESG (Environmental, Social, and Governance) concerns.
• 🚫 ESG investment committees of sovereign wealth funds are currently not giving Bitcoin a positive ESG rating due to outdated or misinformation.
• 🛑 The media narrative on Bitcoin's energy impact has shifted from predominantly negative to more positive, but the academic literature still heavily cites the negative aspects.
• 📉 There's a significant knowledge asymmetry where the ESG committees are not updated on the latest research showing Bitcoin's environmental benefits.
• 🌱 Bitcoin mining is increasingly using renewable energy sources and is contributing to the mitigation of methane emissions, which is a positive environmental impact.
• 💡 The potential for Bitcoin mining to be an environmental force is significant, with the industry leading in the use of renewable energy.
• 🌐 The geographical spread of Bitcoin mining is expanding, with operations moving to regions with a higher proportion of sustainable energy use.
• 🔄 Bitcoin mining's flexibility can help stabilize electricity grids by providing demand response, thus supporting the integration of more renewable energy.
• 🌐 Daniel Batson is involved in CH4 Capital, which finances Bitcoin mining operations that use methane as a power source, contributing to environmental repair.

Q & A

What is the main focus of Daniel Baton's research on Bitcoin?

Daniel Baton's research focuses on the environmental impact of Bitcoin mining and, more recently, understanding the barriers that prevent Sovereign Wealth Funds from investing in Bitcoin.

Why is there a potential interest from Sovereign Wealth Funds in investing in Bitcoin?

Sovereign Wealth Funds are interested in investing in Bitcoin due to its potential as an asset class. However, they are currently unable to do so due to perceived environmental, social, and governance (ESG) concerns.

How much is the total asset under management (AUM) of Sovereign Wealth Funds and public Pension funds combined?

The combined AUM of Sovereign Wealth Funds and public Pension funds is $35.7 trillion.

What could be the potential impact on Bitcoin's market cap if Sovereign Wealth Funds were to invest 1% of their AUM in Bitcoin?

If Sovereign Wealth Funds were to invest 1% of their AUM in Bitcoin, it could potentially lift the price of Bitcoin to over $148,000, based on the current ratio of dollar invested to market cap increase.

What is the main barrier preventing Sovereign Wealth Funds from investing in Bitcoin according to Kevin O'Leary?

According to Kevin O'Leary, the main barrier is not a lack of interest but a lack of ability due to ESG investment committees not giving a positive assessment of Bitcoin's ESG profile.

What is the current media narrative on Bitcoin's energy impact, and how has it changed?

The media narrative has shifted from being predominantly negative to being more positive, with about 60%-70% positive coverage. However, the negative literature still has significantly more citations than the positive.

What is the role of the Digital Assets Research Institute in the context of Bitcoin's social and environmental impact?

The Digital Assets Research Institute is working to compile existing peer-reviewed research on Bitcoin's social and environmental impact and adding their own peer-reviewed research to the field.

How has Bitcoin mining been beneficial for renewable energy and methane mitigation?

Bitcoin mining has been beneficial by stabilizing grids, making renewable energy supplies more profitable, and incentivizing the use of renewable energy. It also helps in mitigating methane emissions by using energy that would have otherwise been wasted or polluting.

What is the current global trend in Bitcoin mining in terms of energy source?

The global trend in Bitcoin mining is moving towards the use of renewable energy sources. Since the migration of hash rate from China, there has been a significant increase in the use of sustainable energy, with the percentage now in the mid-50s.

How does Bitcoin mining help in methane mitigation, and what percentage of Bitcoin's emissions is mitigated this way?

Bitcoin mining helps in methane mitigation by using energy from sources like landfill gas that would have otherwise been released into the atmosphere. Currently, 7% of Bitcoin's entire emissions are mitigated through the use of emission-negative sources of energy.

What is CH4 Capital, and what is its focus in the Bitcoin mining industry?

CH4 Capital is a company that specializes in financing Bitcoin mining operations that use methane as their power source, contributing to environmental repair and the use of renewable resources.

Outlines

00:00

🌿 Bitcoin's Environmental Impact and Sovereign Wealth Funds

Daniel Baton, a Bitcoin advocate, discusses his research into the environmental impact of Bitcoin mining and the challenges Sovereign Wealth Funds face in investing in Bitcoin due to outdated ESG perceptions. He highlights the potential for Bitcoin to positively influence the environment and energy consumption, and the importance of addressing the knowledge asymmetry between the Bitcoin community and ESG investment committees.

05:02

💡 Transitioning Research to Engage Sovereign Wealth Funds

Daniel Baton explains his transition from studying Bitcoin's environmental impact to engaging with Sovereign Wealth Funds and their investment mandates. He emphasizes the significant assets under management and the potential market cap increase if these funds were to invest in Bitcoin. Baton also discusses the need to re-educate these funds about the current environmental benefits of Bitcoin mining to overcome investment barriers.

10:04

🔒 Addressing Misinformation in Bitcoin's Environmental Narrative

The conversation delves into the misinformation surrounding Bitcoin's environmental impact, which has led to a reluctance among Sovereign Wealth Funds to invest. Daniel Baton outlines the importance of purifying the 'reservoir of information' and healing the misconceptions that have been ingrained due to outdated narratives. He stresses the need for a step-by-step approach to address and debunk these misconceptions.

15:06

🌐 The Global Impact of Bitcoin Mining on Renewable Energy

Daniel Baton provides examples of Bitcoin mining's positive global impact, particularly in promoting renewable energy and grid stabilization. He discusses ongoing projects in various countries, emphasizing the growth and potential of these initiatives. Baton also addresses criticisms about the initial strain on grids, explaining how Bitcoin mining operations have actually facilitated the expansion and profitability of renewable energy sources.

20:07

🛠️ The Role of Bitcoin Mining in Methane Mitigation

Baton highlights the role of Bitcoin mining in methane mitigation, explaining how mining operations are utilizing methane captured from landfills and other sources that would otherwise contribute to pollution. He discusses the creation of CH4 Capital, a company focused on financing Bitcoin mining operations powered by methane, and the broader environmental benefits of this approach.

25:08

🏦 The Significance of State Pension Funds Investing in Bitcoin

The discussion turns to the recent investments in Bitcoin by state pension funds in Wisconsin and Michigan. Despite the relatively small allocations, these moves signal a significant shift in institutional investment strategies. Baton explains the potential impact of such investments on Bitcoin's price and the importance of these developments in normalizing Bitcoin as an investment within the institutional landscape.

30:09

🌱 The Expansion of Bitcoin Mining and Renewable Energy

Daniel Baton provides an overview of the global expansion of Bitcoin mining, particularly in countries with a focus on renewable energy. He discusses the rapid increase in the use of sustainable energy sources by the Bitcoin mining industry and the potential for this trend to continue, further enhancing Bitcoin's environmental credentials.

35:10

🌍 The Future of Bitcoin Mining and Environmental Repair

In the final paragraph, Baton envisions Bitcoin mining as a leading industry in environmental repair, with the potential to become a major force in combating climate change. He emphasizes the industry's current leadership in renewable energy consumption and the importance of continuing to educate and re-evaluate outdated perceptions of Bitcoin's environmental impact.

Keywords

💡Bitcoin

Bitcoin is a decentralized digital currency that operates without a central bank or single administrator, and transactions are verified by network nodes through cryptography. In the video, Bitcoin is the central theme, with discussions focusing on its environmental impact and potential for institutional investment. The script mentions Bitcoin's price movements in response to institutional adoption and its role in renewable energy and methane mitigation.

💡Sovereign Wealth Funds

Sovereign Wealth Funds are state-owned investment funds that invest globally in various assets. The script discusses the potential for these funds to invest in Bitcoin, which could significantly impact its market price. The funds are currently hesitant due to perceived environmental, social, and governance (ESG) concerns.

💡Environmental Impact

The environmental impact refers to the effects of human activities on the environment, often in terms of pollution or climate change. The video script addresses misconceptions about Bitcoin mining's environmental impact, highlighting research that shows Bitcoin can actually support renewable energy and methane mitigation.

💡ESG Investment Committee

ESG stands for Environmental, Social, and Governance, which are factors used to measure the sustainability and ethical impact of an investment. In the script, it is mentioned that ESG investment committees are currently not viewing Bitcoin favorably due to outdated information about its environmental profile.

💡Misinformation

Misinformation refers to false or inaccurate information that is spread unintentionally. The script discusses how outdated or incorrect information about Bitcoin's environmental impact has led to a negative perception among Sovereign Wealth Funds and other institutions.

💡Renewable Energy

Renewable energy is energy generated from resources that are naturally replenishing and sustainable, such as wind, solar, or hydroelectric power. The video emphasizes how Bitcoin mining operations are increasingly using renewable energy sources, which is a key point in the argument for Bitcoin's positive environmental impact.

💡Methane Mitigation

Methane mitigation involves reducing the release of methane, a potent greenhouse gas, into the atmosphere. The script mentions projects where Bitcoin mining uses energy from captured methane, thereby preventing it from contributing to climate change.

💡Institutional Adoption

Institutional adoption refers to the acceptance and use of a technology, asset, or concept by large organizations or institutions. The video discusses the potential impact of institutional investors, such as Sovereign Wealth Funds, adopting Bitcoin and how this could drive its price and acceptance.

💡Decentralization

Decentralization is the distribution of power away from a central authority. Bitcoin is highlighted in the script as a decentralized currency, which challenges traditional financial institutions and systems, leading to resistance from entities that could be disrupted by this technology.

💡Demand Response

Demand response is a system where energy consumption is shifted to times of lower demand or higher supply, often in response to signals from grid operators. The script mentions Bitcoin mining's ability to provide demand response services, making grids more flexible and able to handle more renewable energy.

💡Stranded Energy

Stranded energy refers to electricity that is generated but not used, often due to lack of demand or transmission infrastructure. The video script discusses how Bitcoin mining can utilize stranded energy, making it profitable and reducing waste.

Highlights

Daniel Baton, a tireless advocate for Bitcoin, has shifted his research focus to understand why Sovereign Wealth Funds have a roadblock to investing in Bitcoin.

There is a massive $35.7 trillion in assets under management in Sovereign Wealth Funds, which could significantly impact Bitcoin's market cap with even a 1% deployment.

Sovereign Wealth Funds are hesitant to invest in Bitcoin due to ESG investment committees not giving a positive assessment of Bitcoin's environmental profile.

Knowledge asymmetry exists between the current understanding of Bitcoin's environmental benefits and what ESG committees believe based on outdated information.

Bitcoin mining is increasingly using renewable energy sources, which could help in methane mitigation and contribute positively to the environment.

Bitcoin mining operations are being built alongside renewable energy plants, promoting the growth of sustainable energy infrastructure.

The media narrative on Bitcoin's energy impact has shifted, but the literature cited still heavily favors negative perceptions.

Bitcoin mining is stabilizing electricity grids and prices, contrary to common misconceptions.

Bitcoin mining's growth is contributing to a significant increase in the use of sustainable energy in the industry.

ESG investment committees' reluctance to invest in Bitcoin is based on obsolete information and a lack of updated research.

The environmental impact of Bitcoin mining is being reassessed, with new research showing positive externalities.

Bitcoin mining is being recognized for its role in stabilizing grids and incentivizing renewable energy, rather than being a strain.

CH4 Capital is financing Bitcoin mining operations that use landfill gas as a power source, showcasing Bitcoin's potential for environmental repair.

Bitcoin mining is leading to the construction of additional energy infrastructure, such as extra lanes on a highway, to alleviate congestion.

Critics are gradually accepting the positive environmental impact of Bitcoin, as more peer-reviewed research and real-world examples emerge.

Bitcoin mining's use of renewable energy is happening globally, with operations in countries like Paraguay, Uruguay, and El Salvador.

Daniel Baton emphasizes the importance of re-educating and empathizing with those who hold misconceptions about Bitcoin's environmental impact.

Transcripts

[Music]

welcome back to the Bitcoin layer I'm

Nick baa today we welcome back Daniel

baton he is a tireless advocate for

Bitcoin and focused on specifically the

environmental impact of Bitcoin mining

lately he has transitioned his research

to include the Sovereign wealth fund

complex and trying to understand why

specifically Sovereign wealth funds have

a roadblock to investing in Bitcoin

Daniel great to see you welcome back to

the show great to be back thank you so

let's start with your overall approach

here why have you started to get into

Sovereign wealth funds and specifically

their own invest investment mandates and

why they are or are not able to invest

in Bitcoin I think some of the best

discoveries you make in Life or

accidental and this was a complete

where I was interested in who the next

group of institutional adopters of

Bitcoin would be was looking at Nation

States was looking at Pension funds

Sovereign wealth

funds Wall Street and realized that

there was

35.7 trillion dollar of assets under

management in Sovereign wealth funds so

that's a combination You've Got The

Sovereign wealth funds and you've also

got public Pension funds the Third group

of central banks we're going to exclude

them because I don't think they're going

to be investing in Bitcoin anytime soon

but if you look at those other two

categories that's 35.7 trillion of

AUM and if a 1% deployment into Bitcoin

were to happen uh we can calculate based

on the current ratio of dollar invested

to market cap increase that it would

lift bitcoin price to over $148,000

now is an 1% AUM investment reasonable

feasible well that's actually less than

a lot of the funds on Wall Street have

been investing today which is in the 2

to 3% threshold so we know that it's

absolutely possible and so then then I

just got curious to go well why are they

not

investing and I stumbled across a an

interview with Kevin oerry on what

Bitcoin did a couple of years ago and uh

irrespective of what you might think

about know Larry's choice in crypto

exchanges uh he's pretty good when it

comes to his knowledge of sovereign

wealth funds he spends a lot of his time

dealing with them he's one of the people

who knows him very well in the world and

he put it very simply and he said that

all of the Sovereign wealth funds want

to invest into Bitcoin it's not through

lack of want he said it's through lack

of ability and he said that all of these

funds have an ESG investment

committee and right now none of them are

giving a positive tick in the box of

bitcoin's ESG

profile and this got me curious because

this is an area that I've spent a lot of

time researching over the last two years

and I realized that there was a massive

I wouldn't even call it information

asymmetry but a knowledge asymmetry

where the knowledge that we now have

about Bitcoin and its environmental

benefits is now so different to what the

ESG investment Committees of sovereign

wealth funds believe about Bitcoin which

has been informed largely through

information and misinformation at least

three years old uh that if we can

collapse that knowledge asymmetry then

we can remove a blocker that has

prevented Sovereign wealth fund adoption

into Bitcoin and this can be something

that potentially adds fuel or even fuels

the next Bitcoin Bull Run so that got me

kind of excited and going down a path of

saying well let's spend some time on

this because this seems a valuable thing

for me to be doing some further research

on and not just researching but starting

to meet some of these people at the

Sovereign wealth funds talking to their

ESG investment committees and starting

to understand why they can't invest and

what they need to know and what

re-education is required in order for

them to feel comfortable not only

comfortable with be Bitcoin as an ESG

asset but that it actually strong tick

their ESG box which it absolutely does

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Daniel the reason that we continue to

have you on as a repeat guest here is

that you your efforts

inside the lines and with these

Sovereign wealth funds and trying to

explain to them the misinformation that

they have received and converting that

into actionable investable information

about Bitcoin it's so important

especially because with us sitting in

our chairs here at home we already know

that Bitcoin is not a danger to the

environment or a danger to the globe

that it actually is potential to really

benefit our whole energy consumption you

know that that's a theme of our show

here and part of your research too so

the reason that we are so excited about

your work is that you're the one that's

actually going to have the conversation

to teach them that hey you are working

off of incorrect information here is the

correct information and the result is

the unleashing of trillions in capital

that can take Bitcoins priced to several

hundred, so it's exciting for for us

from a price perspective but you're the

one that's going to have the

conversations with them so tell us what

the beginnings of those conversations

are like because I'm sure that because

you have truth and facts on your side

and all they have is obsolete propaganda

to go off of that if they are

open-minded it must be an easy

conversation right or am I

wrong like a lot of things the strategy

is easy but the implementation of the

strategy is non-trivial so if I were to

go in there and say hey you guys have a

lot of really obsolete ideas you've been

making bad decisions on bad data for a

long time but I have the source of Truth

and I've come to educate and Enlighten

you you can probably imagine how that's

going to go so it's not enough that you

have some

information uh that other people don't

that's why I make the distinction

between information asymmetry and

knowledge

asymmetry uh information asymmetry is

tradable however you need to recognize

that that information is valid uh that

it is a correct view of the world

otherwise you could lose and there's

risk and these people are risk adverse

they're managing the wealth of sovereign

Nations and so the default position is

if I have two different versions

of events about or two different sources

of truth about Bitcoin and whether it's

good for the environment and good for

people or not then I will default to the

one which is most common which is most

familiar and that my peers in the

industry have been espousing for some

time so that's what we're working

against so it's not trivial to turn

these things around um it requires not

just fancy charts and good charts and

good data and even peer-reviewed

scientific literature but walking people

through their uh misapprehensions and

sometimes misinformation step by step

and you're in the business of education

so you understand better than most how

re-education is actually harder than

education because you've got you're not

starting from Ground Zero with people

who are necessarily just curious you're

starting with people who have a certain

belief system that in order to be

receptive to new information uh needs to

be a little bit softened and needs to

become receptive as you say so that's

the hard part so the strategy is easy

the strategies are Nob brainer the Imp

impementation of the strategy is what's

going to be requiring some

work understand so what are those

starting points when you say you're not

starting from Ground Zero but you're

actually starting from a negative

perspective um what are what are some of

the first battles that you have to fight

on the misinformation front and and how

do you easily break down or maybe not

easily but how do you break down some of

that information

from the

Geto so there's this new Institute

that's recently formed called the

digital assets Research Institute

they're doing some fantastic work and

really bringing together a lot of the

existing peer-reviewed research on

bitcoin and social and environmental

impact as well as adding their own

peer-reviewed research uh fantastic

resource and what they've recently found

out is that two things number one and

this is celebration time the media

narrative on bitcoin and its energy

impact has changed and we know that

because we can chart over time that the

amount of negative to positive has

fundamentally changed in

2021 it was 3/4 negative today it's

about 60% 70% positives that's a massive

turnaround however uh there's a big

caveat to that uh someone from the

digital assets Research Institute then

said well let's look at the literature

that's been cited and he found that the

negative literature the negative peer

review journals had 45 times as many

citations as the

positives so what we have to contend

with is that backdrop the analogy that I

use is that the media narrative is

shifted so that means that we're no

longer poisoning uh the drinking supply

of information that people receive about

Bitcoin and its environmental and social

impact however that doesn't mean that

everyone who's been drinking from that

drinking Supply is suddenly miraculously

healed

that doesn't mean that the the reservoir

that you have just because there's no

more poison being put in Upstream is

suddenly purified it doesn't so we've

got to purify that reservoir of

information and we've got to heal those

people who have been drinking from that

poor information for many

years so in terms of their starting

point uh it's incredible but most people

still believe that Bitcoin is mostly

powered by fossil fuels even though that

hasn't been true for 3 years they still

believe that Bitcoin destabilizes grids

even though there is cons the scientific

consensus says the exact

opposite they still believe that as

bitcoin price increases that Bitcoin

emissions will grow even though we have

charted data that shows that that's not

the case because of machine efficiency

improvements and moving to sustainable

energy and we still have people who

believe that Bitcoin mining is

responsible for the opening up of

previously mothed fossil fuel plants

even though we have data which has

debunked that actual security filings

and the

one Bitcoin mining operation which was

running off a fossil fuel supply being

coal that hasn't been mining off a coal

Source since 2021 people just don't know

that so part of it is about

acknowledging uh and not making them

wrong for believing what they believe

because they're reading the same source

as everyone else

does acknowledging that when I first

came to bitcoin I thought the way they

did I thought it was bad for the

environment too because I trusted my

information sources and it was only as a

result of doing some independent

research that I realized that those

information sources were either

incorrect or out of date so going

through that same process step by step

hearing the objections is going to be

super important but that's the starting

point we we're not in many cases

starting with people who are neutral but

people who think that Bitcoin is

negative and that's the reason they've

said to their Sovereign wealth fund

invest committees you cannot invest in

Bitcoin now one of our recent episodes

that we did together Daniel focused on

propaganda specifically coming out of

the European continent the ECB and the

bis specifically to name two

institutions that are responsible for

some of this negative Bitcoin propaganda

but I want to just bring that concept

back here you talk about the poisoned

water supply of existing knowledge on

bitcoin we can specifically attribute

blame to a couple of these European

financial

institutions for basically stoking this

fire and it's provided a a roadblock or

a hurdle for us to to get through in

terms of educating people so before I

ask you the next question I just want to

remind people that this poison supply of

knowledge it didn't just happen to get

there it has been placed there very

specifically by financial institutions

that feel threatened by Bitcoin or the

concept of Bitcoin and the concept of

Bitcoin has a lot to do with the

decentralization of power which is

something that Brussels just physically

cannot understand so just to tell people

that the information that got there it

wasn't it didn't just magically appear

so the hurdle that we have

is coming from people that are malicious

in nature so I'd let you respond to that

yeah one of the problems that we face is

that whenever you have any disruptive

technology this always happens without

question when the automobile came to the

four the horse and buggy industry didn't

just roll over and say Here's a superior

technology let's convert and sell cars

instead they did everything in their

power to try to convince people that

these things were going to blow up they

were unsafe and the horse and buggy was

better uh when the internet came in you

had telecommunication companies that

were threatened because they could lose

substantial amount of Revenue to voice

over IP trying everything in their power

pulling regulatory levers uh creating

fear in the marketplace about the

unreliability of this technology the

print media attacked them uh everyone

attacked them and there was also a lot

of fud a lot of fear uncertainty and

doubt created about

their carbon footprint articles and

Forbes from dating back to 1999 saying

that it's going to fire up all this

whole new generation of coal

plants and then everyone realized the

utility of the internet and that it was

great and most of those articles were

based on flawed assumption about what

happens to machine efficiency over the

time and and a whole lot of other flawed

assumptions and people got on with their

lives and so what we seeing with Bitcoin

is nothing new so we shouldn't be

surprised by this and if anything it's

more pronounced because the people that

and the institutions which Bitcoin can

disin intermediate are some of the most

powerful institutions in the world we're

talking about taking power out of

central banks because with Bitcoin you

don't need a central bank it dis

intermediates them you think people have

enjoyed the privilege of being able to

print money for Generations are suddenly

going to roll over and say what a

wonderful technology we're so happy it

came along of course they're not they're

going to do everything possible to

predict their position and that's going

to be pulling regulatory levers and

that's going to be pulling information

levers to create blocks and whether you

like their tactics or not they're not

new tactics and they've been highly

highly effective and that's why they're

using them and the reason the

environmental attack Vector has been

used so repeatedly has been that it's

been so effective because now you have

these whole institutional wealth funds

who are unable to invest in Bitcoin

you have Norway whose Parliament is

seriously contemplating a ban on Bitcoin

mining and you have Iceland considering

similar moves and you have the EU

working with the European Central Bank

and isma the European market authority

to create policies about Bitcoin which

one of which would be the labeling of it

as harmful to the environment

why because then you can create policies

around Bitcoin which make it difficult

for people to invest and in some cases

outright preclude people from investing

in it so it's been highly highly

effective now in terms of the

research there has been some and a lot

of Institutions who have been innocent

who genuinely care for the environment

and they have read uh or drunk from this

poisoned well of information you can say

and so they're innocent in so far as

they're not creating new misinformation

but they're culpable because they

haven't done the research to make sure

that the information sources that

they're gaining are coming from good

authoritative sources rather than vested

interest now this question of vested

interest is actually really interesting

so Andrew Bailey who's doing some great

work he's recently written a book called

resistance money uh pointed out

something recently which is as soon as

someone who holds Bitcoin says something

positive about Bitcoin then people

automatically say well of course you're

going to say that you have a vested

interest but if you he said well that's

actually an absurd argument wouldn't you

like someone who's talking about a

domain to be a user of that

technology would you expect that no one

should comment about medical research

who's a doctor because they have a

vested interest in selling

Pharmaceuticals would we say that no one

should do Dentistry research who goes to

a dentist or is a dentist because

clearly they have a vested interest in

selling their Dentistry products and

services of course we wouldn't they

would be the very people we turn to and

say look we need your expertise because

this is the exact domain that we're

seeking knowledge and you have that

domain knowledge but the very people who

are most qualified to give their expert

opinions on Bitcoin mining have been the

ones who have been excluded from the

conversation based on this false notion

that somehow everyone is conflicted and

has vested interest and therefore

shouldn't be even engaged with now in

reality of course everyone's

conflicted um you can say well you hold

fiat currency therefore you're

conflicted because you have a predel to

say that Bitcoin is not going to be

performing as well as your Fiat

instruments so as long as everyone's

transparent about their Holdings then

everyone should be Consulting no voice

or Viewpoint should be dis

um should be invalidated

just in the same way that even a central

Banker whilst we can say well you have a

conflict of interest doesn't mean that

so if they have good arguments uh that

stand up to logical scrutiny then their

potential conflict interest doesn't mean

that their logic is not valid um so we

have to actually look at Point by Point

by Point does the logic make sense is

this based on sound research are the

assumptions correct and that's where you

start to find that if you look at the

assumptions behind most of the

Environmental Research in Bitcoin they

make no sense whatsoever and my

consistent view was that when we looked

at the people who actually had the

knowledge who who knew about renewable

transitions who knew about solar energy

wind energy who knew about grids who

knew how energy worked who knew how

methane mitigation worked and they knew

about Bitcoin mining in other words the

informed people who had the domain

knowledge to create meaningful insights

on the subject they came to the same

conclusion which was it stabilizes grids

it stabilizes electricity prices its

emissions are not increasing it helps us

mitigate methane where other things

cannot do it profitably and by creating

a marketplace where you can sell demand

response in other words help to

stabilize grids where there's excess

load they actually allow you to put more

renewable energy onto the grid which

comes from intermittent sources because

of their flexibility and because they

can be a customer of that energy from

renewable

generators they can make renewable gener

more profitable which proliferates the

use of renewable energy on grids no

question and it's now backed up by the

scientific consensus in the last two

years there have been 10 peer-reviewed

articles on bitcoin's environmental

impact nine of them were showing

positive externalities the only one that

showed negative externalities was from

un University and it was using a data

set which was 3 years

old absolutely fantastic and remember

folks that it's not just central banks

that have the power to create money it's

the commercial Banks as well with their

deposit Banking and their lending money

into existence the fractional Reserve

System is a function of both the central

banks and the commercial banking system

working together so you can't expect the

fight against Bitcoin to originate from

the incumbents that includes both the

public and the private institutions and

special shout out to all those people

tracking the Wikipedia entry changes

that come from these Mega Banks we don't

know why they do them but they are

definitely trying to control information

Daniel you talk about the

Wisconsin pension fund allocating we

recently heard about Michigan as well

these even though the numbers are small

of the initial Investments the news

items are enormous to me I mean these

are

absolute stalwart states in the United

States in the midwest so not on either

one of the coasts uh I just think

the decision for these two state pension

plans to get involved in Bitcoin speaks

volumes I'm wondering what your thoughts

were when you heard about Wisconsin and

Michigan it it's huge Wisconsin invested

I think. 2% of its auum

so the amount sounds big they invested a

total through grayscale mainly of I

believe their current position is around

160 million that's nothing compared to

their total AUM that's literally a

dipping of the toe maybe even the toe

nail in the water to test the waters

however even that very small allocation

which should have had a very minimal

impact on bitcoin price had a major

impact on bitcoin price that day bitcoin

price moved up $1,000 on the back of of

that announcement so what happened was

uh that sort of price movement is not

explicable by the amount of new money

coming in through the Wisconsin pension

fund by itself what that did is it

excited others in the Bitcoin Community

to say this is a waterers shed moment

this is the first time ever even though

the amounts relatively small but this is

the first time ever that a sovereign

Fund in the form of a public pension

fund in this case has invested into

Bitcoin and that excited upward price

movement now it would have been a lot

larger if it had been a 1% allocation of

course it is a dipping of the toe in the

water but now we've had other ones

Michigan as you say and I believe

there's others that are in the works as

well so we're already starting to see

this movement happening and what's

interesting about that to me is that if

you look back to

2021 everyone was expecting on the back

of micro strategy announcing its

corporate Treasury and El Salvador

announcing nation state adoption that we

would have a sthe of new corporate

treasuries of significant scale and a

swaye of new nation state adoption that

didn't happen we haven't had a second

Nation we haven't had a second or

Salvador it's only very recent we've had

a second micro strategy and nowhere near

the same scale and that's because for

nation states to adopt Bitcoin it's hard

there's so many things that have to be

true for that to occur and similarly for

a large company to put Bitcoin in its

balance sheet it's hard which is why so

few have done

it however with Sovereign wealth funds

who have huge amounts of assets at their

disposal it's not as hard the blockers

yes there is a blocker and there is

effort to requ required to go through it

and it is hard but it's nowhere near as

hard in my view is convincing a nation

state to adopt

Bitcoin so I see this is an area where

whilst it's hard it's not as hard as

other areas and

it's also that there's only one blocker

there's not a whole bunch of them and in

most cases that is the ESG investment

Committee in other words we can be very

focused and if we can start to get

different answers from these ESG

investment committees then everything

starts to move it's like there's a

blockage in the hosing and we remove

that blockage then we unleash the flow

of institutional Capital into

Bitcoin now Daniel I want to ask you

about the

specific efforts going on with Bitcoin

mining on the environmental front you

talk about methane mitigation a lot here

and the generation of well the

initial building of renewable plants

that are being built alongside Bitcoin

mining operations in order to basically

bootstrap operations that wouldn't have

otherwise existed so on the ground take

us a little tour around the world from

Costa Rica to Latin America to uh Africa

to North America what are you seeing on

the ground with some of these very very

important methane mitigation projects

and renewable energy projects that

really take Bitcoin from this negative

light to putting it in an extremely

positive light and something that we can

share with the world and promote uh to

show bit coin's potential yeah so when

you're looking from the position of a

Bitcoin critic the first criticism that

people have of Bitcoin is it does

nothing positive for the environment and

then you show them the peer-reviewed

research it says that it does and the

actual case studies of where it has

patently helped to bring more renewable

energy onto grids to help to mitigate

methane to reach some of the 's methane

mitigation targets and to help that

renewable trans

and the movement towards net zero

emissions and then people will the

credits will grud accept Okay it's

happening

but it's only anecdotal examples it's

only happening from time to time and so

we're at the point now where people the

critics are gradually accepting yes it

is happening okay it's in the peer

review journals okay the grid operators

are saying it's useful the renewable

suppliers are saying it's useful the

people who are mitigating methane is

saying that it's doing that okay but

it's not happening at scale it's only

these these little pockets here and

there and the overall impact a store net

negative um so what I'm sharing now is

to say

well these are Pockets at the moment but

everything started somewhere Facebook

started with 20 users or so um and what

we have to look at is what sort of

growth curve is it on and you're right

this is not just happening in Texas if

we look at helping renewable energy get

onto grids it's happening in there's

discussions happening with grid owners

in India at the moment there are people

in New Zealand already that I know about

who are using demand response who have

hydro dams and in the rainy season all

of that water spills over the edge of

the dam and now they're able to monetize

that energy turn into Bitcoin so which

means that they are more profitable they

can pull that profit into upgrading the

facilities they can pour it into

proliferating the use of renewable

energy and at the same time they have

Arrangements where when the grid needs

that electricity they curtail very fast

which means it gives much more

flexibility to the grid operator such

that now they can put more intermittent

variable energy on the grid knowing that

they have the shock absorber where

Bitcoin can very quickly go off the

other criticism that you get uh from

some people who don't understand the

wider context in which uh grids operate

as I'll say well sure Bitcoin is helping

stabilize grids by powering down but it

was straining those grids GS in the

first place by drawing so much load

which sounds like quite a convincing

argument but what it ignores is that

there wouldn't have been so much

generation capacity on the grid in the

first place if it hadn't been for

Bitcoin mining operations making those

variable renewable energy supplies more

profitable so the analogy is more like

this it's like you have a five Lane

Highway and then you have the citizen

who comes along this is the Bitcoin

mining who say okay we're going to give

you enough money to build an extra lame

which is going to remove a lot of your

peak hour congestion problems and

everyone's really happy and I say well

we do want to use this highway

ourselves however when it's Peak our

traffic we will take the nearest offramp

so what that means is you'll have enough

money to build an extra Lane which

removes removes congestion and we'll

have a contract with you where we only

use that lane where it's not creating

congestion and this is the service that

Bitcoin mining has provided for grids

around the world

now so yes a lot of the expansion that

happened when hash rate migrated from

China it went and again this is part of

the misinformation people say well it

just went to using uh coal in China to

using coal at

Kazakhstan and that's a half truth

because initially some of it did go to

Kazakhstan some of it went to America

some of it went to other places of the

world but the hash rate that went to

Kazakhstan only stayed there very

temporarily and and most of the measures

uh came from Cambridge data which is

still marooned back on January 2022

which was the last time they updated

their mining map when Kazakhstan

represented 13% of global hash rate and

of course because most of that was

fossil fuel-based energy that skews your

results considerably but what most

people don't know is that since then and

we know this based on bit River data is

that Kazakhstan is representing less

than 1% of global hash rate and most of

that hash rate has now gone to places

such as OT which is increasingly using

renewable energy which uses very little

coal indeed it has a much lower emission

intensity it's going to places like

Paraguay Uruguay El Salvador places

which are 100% renewable energy based

and that's why you've seen this Spike

and this rapid rise since the migration

of hash rate from China where it's gone

from the mid-30s to the mid-50s in terms

of its use of sustainable energy it's

happening in grids all around the world

now in terms of methane

mitigation you have 7% of bitcoin's

entire emissions are now mitigated

through people who are using emission

negative sources of energy and you might

say well how is that possible how can

you mitigate emissions through using

energy and this is one thing people

don't understand that most people still

think that you can logically go from

saying Bitcoin uses energy a lot of

energy to therefore it's bad for the

environment in one breath and you just

can't because what we found is Bitcoin a

lot of that energy used is stranded is

wasted a lot of it's renewable a lot of

it is helping stabilize grid and

incentivize more renewable energy and

critically a lot of it is coming from

sources that otherwise would have been

polluting the environment such as

methane and this is one of the things

that I'm got so excited about that I

worked with a group of Founders to

create a company which is specializing

and funding Bitcoin mining operations

that are using methane that would have

gone into the atmosphere and caused

Untold pollution and contributed to

climate havoc and we're taking it out of

the atmosphere and we're sending it

where it should be sent which is to a

generator to power Bitcoin mining

operations not only tremendously

exciting yes and not only is Bitcoin not

harming the environment but it actually

has the potential to be the largest

Force

of environmental repair that the world

has ever seen from an from a specific

industry standpoint and we also know

statistically speaking that Bitcoin

mining as an industry has the highest

consumption or on a percentage basis of

renewable resources on the planet so

Bitcoin is for the environment this

whole misinformation campaign it's stale

and as Daniel suggested suggested we

have to do our best to not ridicule the

obsolete information but instead do our

best to re-educate sympathize and

empathize with the other side in that we

understand that your we understand your

concern but let us explain to you how

your concern is no longer valid based on

the current data Daniel baton thank you

so much for always championing

this Bitcoin mining industry explaining

to people how it is actually helping the

world instead of harming the environment

please tell people where they can find

your ongoing fantastic work best place

to find me these days is on X so DS

baton and you'll see me tweet there from

time to time and then our company is CH4

capital.com uh and that is specializing

in financing Bitcoin mining operations

which are using landfill gas as their

power source Daniel thank you so much

and we'll catch you guys next time thank

you

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