Clanzenomics: Bitcoin ban proposal, ESG, PoS and PoW, The Green Thematic Strategy

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In this week's market wrap for Friday, September 9, Dr. Michael Kollo discusses the Bitcoin ban proposal, ESGs, Proof of Stake and Proof of Work, and Clanz' Green Thematic Strategy.


This is Michael Kollo from Clanz coming to you on September the ninth. So just to kick us off today I have a quick joke for you. What is Satoshi's biggest weakness? Yes. It's crypto nite. Now that we have the dad jokes behind us let's get on with the week. This particular week has been actually very similar to what we have seen over the last month in theme, we've seen oil prices coming down. I think it was down about 3% over the course of the week. We've seen technology stocks rally, in fact, we've seen a broad market rally across equities by couple of percentage points, which again, over the course the last three months brings us to quite a healthy level of 6 to 7 percent for equity markets so risk on. Oil is going away. Everything is going to be fine. In crypto land has been certainly a bit of a bit more volatile period as well over the last week.

In fact, so much so that one of the interesting news articles that I want to expand on today. Is really around the recent announcement from the white house around limits or eliminate. So there was a bond in executive order triggers shock in the US, bitcoin banned proposal after radical Ethereum upgrade and wild crypto price swings. So what was this all about? And why does this create an interesting thematic play for all of you people in there investing in the space. So I want to give a little bit more detailed on what this actually was about. So the office of science and technology really talked a lot more about the clean energy impacts of Bitcoin and differentiated between the idea of proof of stake and proof of work. We all know that Ethereum on a successful merge will be coming to a proof of stake. And that is one of the big benefits that's talented quite frequently is the environmental impact of that change. And in fact, the office in this case of science of technology made this a specific point and what they talked about. Is there, maybe they should be limiting or even eliminating the use of high energy, which is proof of work, intensity, consensus mechanisms across their blockchain space. So whether they can do this or not, or whether they're able to enact this or not is also a separate topic. What we're seeing here is an environmental concern and a ESG type concern coming into blockchain again through the political power. And if you look at the kinds of cryptos in this case that are either proof of stake or proof of work. Ethereum being the one that's hopefully going to be transitioning out a proof of work to proof of stake.

That the vast majority at the moment of these types of cryptos is really living in the proof of work space. There's about 600 billion in that space, pretty flat over the year in terms of the week of returns, but in the proof of stake on the left-hand side, you'll see some positive returns and you've seen, essentially more movement into that space. So that's a really interesting list. If you now take your eyes across these two sets here. Because really what you're seeing here is on the left-hand side is a future technology that is really about much more environmentally friendly elements. And the right-hand side, you see something that's probably more secure in some ways and more distributed, but he's a lot less environmentally friendly and you might just see that as regulation develops and as regulators starting to look at this space. Not only will they start to regulate it in terms of usage. But they might start to push more and more pressure for blockchains and cryptos to start moving to a proof of stake as well. There's an interesting piece of research here from digital asset research. And again, this was, early this year and told us about what I just said. Around this notion that the proof of work is really defined as consuming a large amounts of electricity. And in fact, proof of stake is so much better because it does not require the same level of computational power. And so really, if you think about these facts being put together you see a lot more regulation and government coming to this space, you should see a lot more movement and blockchain emphasis coming into proof of stake as well.

And if you think that ESG or environmental concerns are a big deal. Here's some interesting statistics for you. So I think this report was coming up from Bloomberg. ESG assets may hit $53 trillion by 2025, a third of all global AUM, which is an incredibly large number it's a growing space. You could see that ESG funds in the US alone in terms of the momentum, you see this kind of gradual process. Probably about till 2018 of things holding steady. And then it really started to take off in 2019, 2020, 2021, and, I can tell you in 2022 as well. So, you've got this massive amount of capital that's sitting on the sidelines is chasing and is very interested in green or ESG positive type projects. And then you've got this blockchain as an industry, where six out of seven, in terms of AUM and size is probably sitting in the proof of work, maybe a bit less with Ethereum and really what you're going to see is a lot more pressure on this industry as it becomes mainstream to adopt proof of stake and to become much more environmentally conscious.

When we were thinking about this, at Clanz, what we ended up doing is creating a thematic, green thematic strategy, where we thought, okay, why don't we bundle together? All of those coins and cryptos that use proof of stake. There are much more environmentally friendly and potentially make that interesting for some investors. That are either looking to make an ESG trade or a green trade, or because mainly genuinely interested in the impact on the environment.

And in fact, while we're in a topic of Clanz as well. I just leave you here with a quick bit of. quick news. We're actually capital-raising, we're in the peer-to-peer capital race trail at the moment on market. There I am with Ray on the right hand side with a very purple background. And, probably, not looking at our finest in terms of the white shirts, but hey, at least we're on brand. That's the way I find to think as well. So if that's of your interest or you just curious as to what we do when we do capital raising and make funky videos. You can go check it out in our market. Thanks so much for your attention and have a wonderful week.

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