Bitcoin’s price crash caused by ESG movement, says Ark’s Cathie Wood

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The growing number of ESG-focused investors were responsible for the recent crash in the price of Bitcoin and the wider crypto market, according to comments made by the influential fund manager and the founder of Ark Investment Management Cathie Wood.

Speaking to Coindesk’s Consensus 2021 conference late on Thursday, Wood said Bitcoin had come under pressure from institutional investors amid growing concerns about the environmental impact of mining the digital currency, an issue that has been exacerbated by high-profile actors such as Tesla boss Elon Musk, who recently stopped the company accepting payments in Bitcoin citing its effects on energy use.

READ: Bitcoin price will hit US$500,000, says Ark Investment’s Cathie Wood

In a pre-recorded interview, Wood said the price plunge was “precipitated by the ESG movement and this notion…that there are some real environmental problems with the mining of bitcoin”.

“A lot of institutional buying went on pause,” she added.

Wood went on to speculate that Musk “probably got a few calls from institutions”, highlighting that Larry Fink, the boss of investment management giant BlackRock, is focused on ESG and climate change and that the fund itself is Tesla’s third-largest shareholder.

“I’m sure BlackRock registered some complaints and perhaps there are some very large holders in Europe who are extremely sensitive to this,” Wood said in the interview with podcast host Nathaniel Whittemore.

Despite this, the fund manager said Musk’s antics had encouraged “a lot more conversation” about the impact of Bitcoin which could help improve its environmental profile.

READ: Argo Blockchain joins new Bitcoin Mining Council set up after Elon Musk call

This idea may have gained ground this week after a collection of North American Bitcoin miners agreement to form the Bitcoin Mining Council, an association designed to promote energy transparency and improve sustainable mining practices, following a call with Musk on Sunday.

Wood herself has previously highlighted her bullish attitude towards Bitcoin despite the recent market crash, saying last week that Ark still expects the price of the crypto to reach US$500,000 despite its recent declines.

However, the market seemed slightly less optimistic in early trading in London on Friday, with Bitcoin down 3.5% over the last 24 hours at US$36,974.

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