Cryptocurrencies have lately been grabbing the headlines. You might be still in the sceptics’ camp, thinking that the cryptocurrency market is in a bubble, but there is no escaping the fact that digital money has lately been the word on everyone’s lips. Everybody has been talking about crypto, because the majority of them are presently enjoying the uptrend. Bitcoin (BTC) is hovering near an all-time high, trading at $65,987 at the time of writing. Ethereum (ETH) is up by 2.45% and is trading at $$4,730. Cardano (ADA) has grown to about $2, 00 since the end of October. The price of Ripple (XRP) has since rallied 19%. Other altcoins, such as Shiba Inu and Dodgecoin, are also participating in the general uptrend characterizing the crypto market at the moment.
There are several reasons why cryptocurrencies have been capturing everyone’s attention. Their rise in popularity has been fueled by record high market gains experienced since the beginning of the year. Elon Musk’s tweets have whetted people’s curiosity about crypto. There has been an increase in eco-friendly cryptocurrencies which have attracted environmentally conscious traders. As Cardano and XRP have positioned themselves as greener alternatives to Bitcoin and Ether, traders began looking kindly on them. Impressed by cryptocurrencies’ popularity, people have started turning to digital coins for an extra income. Those of them who have only recently tried their luck in luxurious casinos in North America and elsewhere are now beginning to invest in cryptocurrencies as a more definite source of income.
It is true that by comparison to other nations, Canadians are less enthusiastic about digital coins. According to Hardbacon’s survey conducted in the summer of 2021, only 28% of respondents had cryptocurrencies in their portfolio. About 85% of them owned Bitcoin and 75% had Ethereum. But only 5% of respondents rated BTC as a safe investment. About 21% of surveyed people considered stocks a safer investment. More than 65% gave preference to government bonds. In other countries, such as Vietnam, India, and Pakistan, the number of people owing cryptocurrencies is significantly higher. It is estimated that over 5.9 million people, 6.1% of Vietnam’s total population, have digital coins. But as the popularity of cryptocurrencies increases, more and more Canadians begin regarding them as a valuable source of investment, especially if they prove to be eco-friendly.
There are reasons to believe that official digital currencies in Canada will indeed be more environmentally benign. The Central Bank of Canada has looked at the environmental impacts as part of its research into creating its own cryptocurrencies. It is keenly aware of wasteful methods of mining technologies that are in force when such cryptocurrencies as Bitcoin are mined. Bitcoin mining takes up about the same amount of energy annually as the Netherlands on average does a year, according to data from the University of Cambridge and the International Energy Agency. The goal of the Central Bank is to avoid relying on these environmentally harmful technologies in creating a digital loonie. Cleaner, renewable energy should be used.
When the Central Bank of Canada reviewed the risks to Canada’s financial system, it included a section on cryptocurrencies. It specified that their market capitalization climbed from $200 billion at the beginning of 2020 to over $2 trillion as investors were able to start buying exchange-traded funds holding Bitcoin, Ethereum, and other cryptocurrencies.
The Central Bank is supported by various Canadian projects attempting to remove cryptocurrency from fossil fuels and use hydropower instead. Canadian projects also try to reduce the emission of carbon and thus make cryptocurrency look more attractive in the eyes of traders worrying about the environment.
Canada may be not participating in the cryptocurrency craze as enthusiastically as other countries. But if it issues its digital loonie, it will make sure to reduce the environmental harm of mining and will produce an environmentally friendly digital token using renewable energy.