The Impact Of ESG (Environmental Social And Governance) On Crypto Investment

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INTRODUCTION

We live in times where there is an environmental, social and governance impacts on many forms of investment today infact the impact of ESG is greatly felt in almost any investment as they have proven to be able to influence any form of investment we have and ofcourse even cryptocurrency investment has been impacted to a great extent by ESG (Environmental, Social, Governance).

I mean cryptocurrency offers an investment opportunity and just like every other investment sector have been impacted by ESG cryptocurrency is no exception and ESG impact on cryptocurrency is undeniable and that will form the basis of my discussion today as I try to highlight some of ESG impacts as it concerns or relates to cryptocurrency investment.

ESG (Environmental, Social, Governance) considerations have increasingly influenced various sectors of investment, and the cryptocurrency space is no exception. Here's a breakdown of how ESG impacts crypto investment:

ITS IMPACT ON CRYPTOCURRENCY

ENVIRONMENTAL IMPACT

One of the ESG impact on cryptocurrency investment has to do with the environmental impact itself, now how does this impact cryptocurrency investment, well it does to a great degree as there are growing concerns about some cryptocurrency asset which utilise proof of work consensus mechanism and the amount of energy needed for their mining this right here leads to concern among many.

The mining of this asset class on PoW leaves quiet a large carbon footprint which is not good for the environment and raises question about the ethical morality of this mining if it's worth continuing against the possible damage to the environment.

Well most people who truly are concerned about the environment may not want to invest in this type of cryptocurrency as they feel it isn't ethical I mean why invest in something that has negative impacts on the environment, yes indeed the environment is of great concern to this persons and as such they may lean towards somewhere else.

So the environment plays or impacts cryptocurrency investment hopefully ethereum successfully moves to proof of stake to better attract more investors as the environmental impact and lack of scalability in PoW is the major reason for this move.

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SOCIAL IMPACT

Well another one of ESG impact on cryptocurrency investment is the social impact, what are some of the social impact on cryptocurrency investment.

Well cryptocurrency is an asset class prized to take over traditional form of money because unlike it crypto opens an opportunity for all to freely participate in the financial market without any challenge cryptocurrency gives everyone no matter where you are and the development of the place and opportunity to be involved in the financial market and a sense of financial inclusion those who are unbanked or underbanked enjoy financial services because of cryptocurrency.

Cryptocurrency often has been praised as the future of money seemed poised to replace fiat I mean even Bitcoin is seen as digital gold today so this kind of attracts more people into cryptocurrency especially when they see that this opportunity from cryptocurrency is exactly where there are driving towards that's their objective to give people true financial freedom they are more likely to key in and invest so the transparency nature of cryptocurrency also contributes in attracting investors that are big on ESG.

GOVERNANCE

Cryptocurrency is one such asset that is very high on transparency, infact the transparency nature of cryptocurrency is incomparable to any other currency or asset and is this transparency that makes it equally able to offer full accountability and many ESG focused people are big on well structured governed asset.

It's important for asset to have good governance practice, their operations is not shady and their are a clear process for decision making well organized and all where full accountability is ensured as well, I mean that goes a long way to determine if it attracts ESG investors and cryptocurrency has to offer such in there are to attract investors and ofcourse today we see many cryptocurrency projects that has quite a sound and logical governance practice.

There are projects which has this organized order things are done and their security are quiet a robust one to the delight of ESG investors with decentralized platform and all and ones that are more compliance to regulations are the type of cryptocurrency assets that suits well to ESG focused individuals and the one they are more likely to invest in, a well structured asset properly governed, organized and complies to regulations.

INVESTMENT TRENDS

We see today among the investment trends that cryptocurrencies that are strong environmentally as well are with good governance and even on social levels are good to go are really being favoured by most investors and institutions which helps generate a lot of liquidity for such asset class.

Most institutions and hedge funds themselves are redirecting resources to such projects making them trend highly on the investment board as it's is believe that in the midst of this speculative and volatile market that this type of investment offers some stability to users and are even at a much more reduced risks than others who are not compliant on ESG hence faces scrutiny.

So for a fact EsG impact on cryptocurrency is really note worthy.

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Conclusion

Well the more time passes we come to see that ESG is now the order of the day and most investors wouldn't want to put money in a project that is not ESG compliant, that's environmentally and socially friendly offering a good governance protocol and all, so it's important projects meet up with this for the sake of ESG focused individuals to better improve it's chances of being invested on because for a fact ESG plays or impacts cryptocurrency investment greatly like it does any other asset class.