Stephen Isaacs, an investment advisor at London-based advisory firm Alvine Capital, has projected a grim future for bitcoin despite the asset experiencing record price movement.
Speaking during the Squawk Box show on CNBC, Issacs acknowledged that despite bitcoin’s ability to decentralize the financial sector, the regulatory threat and environmental impact pose a great risk to the asset’s future growth.
His sentiments come after bitcoin plunged over the weekend in the wake of reports U.S. regulators plan to take action on institutions using the asset to launder money. Issacs noted that the development is a hint of what to expect.
“We’ve got a whiff over the weekend of what could happen if regulation comes to this product – I’m not going to call it an asset class. I don’t know where it will end or how it will end, but it will end. And when it ends, it will be ugly because there will be nothing there,” said Issacs.
Concerns over bitcoin’s impact on environment
He further termed bitcoin mining energy usage as a threat to the environment amid the climate change debate. The advisor views bitcoin as a dirty asset. According to Isaacs:
“This is a very dirty product, and it’s getting dirtier by the minute because the amount of energy that is required to mine additional supply is going up.”
For years, crypto critics have slammed bitcoin for the high energy consumption stating it’s a threat to the environment. However, proponents believe the emergence of renewable energy sources will end bitcoin’s power consumption debate.
Currently, large-scale bitcoin mining is done in parts of China where electricity is cheap. Over the weekend, bitcoin dropped 8.77% due to a decline in the bitcoin mining hash rate after reports that the Chinese government instituted blackouts.
The blackouts in the NorthWest region of China emerged due to routine maintenance. By press time, bitcoin was trading at $55,794. On April 14, 2021, the asset surged to a new all-time of almost $65,000 in the wake of crypto exchange Coinbase going public on Nasdaq.