Bitcoin Mining Used More Water Than New York City Last Year
New estimates find billions of gallons needed to support cryptocurrency, fueling concerns about the environmental impact
Bitcoin-mining operations slurp up billions of gallons of water globally each year. Estimates vary, but the annual footprint is projected to surpass 591 billion gallons of water this year, according to an article published last week in the peer-reviewed journal Cell Reports Sustainability.
For comparison, New York City residents and businesses consumed 403 billion gallons in 2022, according to the U.S. Geological Survey.
Miners use water directly to cool their computer servers and indirectly by running both computers and air conditioning systems powered by gas- and coal-fired power plants that require cooling water. Some of the cooling water used by power plants evaporates and is no longer available for anything else.
Bitcoin mining requires massive amounts of energy. During mining, computers generate random numbers in hope of getting the correct one required to unlock fresh bitcoin.
The greater the computing power, the higher the chance that a company or individual running a mining operation can harvest new bitcoins.
The volume of water used to support the mining is an environmental concern, especially in areas that lack freshwater or are at risk of drought.
“We are struggling with water shortages around the world, so having another demand is not something that we would welcome right now,” said Kaveh Madani, director of the United Nations University Institute for Water, Environment and Health in Hamilton, Ontario.
Madani examined the environmental impact of bitcoin mining for the U.N. in a study published in October and found that in 2021, the operations had a global water footprint of 255 billion gallons of water.
Last week’s article in the journal Cell Reports Sustainability found that global bitcoin mining used 415 billion gallons of water in 2021 and 591 billion gallons this year. The author, Alex de Vries, is a doctoral candidate at Vrije Universiteit Amsterdam and founder of Digiconomist, an online platform that tracks environmental impacts of cryptocurrencies.
Madani and de Vries each said getting accurate data about water use is difficult and attributed differences in their estimates to having used different data sources and methods.
The U.N. report relied on data from the International Energy Agency and the University of Cambridge Centre for Alternative Finance. De Vries used the Cambridge data, compiled publicly available data from 34 large-scale bitcoin mining operations in the U.S., and used estimates taken from previous studies of computer-server operations.
In the U.S., bitcoin mining consumes enough water for 300,000 households a year, according to de Vries.
Texas is the bitcoin capital of the U.S., with more than 28% of mining activity, followed by Georgia and New York, according to a September report by Foundry Digital, a New York-based finance and advisory firm.
Finding a solution to quench the water and energy demands of cryptocurrency hasn’t been easy. In 2022, a coalition of environmental groups pressured the bitcoin community to cut its overall use of fossil-fuel generated electricity that requires cooling water, although the results of the effort aren’t yet clear.
Even though the industry continues to grow, it has become 16% more efficient in its energy use from August 2022 to August 2023, according to Perianne Boring, founder and chief executive of the Digital Power Network, an affiliate of the Chamber of Digital Commerce. Most water used by bitcoin-mining operations is recycled or returned to the environment, Boring said.
“Bitcoin miners, like any other industry, have a legitimate right to use water resources responsibly,” Boring said. “Critiquing bitcoin mining for its water consumption is akin to criticizing homeowners for flushing toilets.”
Bitcoin could change its software to require fewer calculations to mine its currency, significantly reducing its need for both electricity and cooling water, according to Paolo Natali, principal at the Rocky Mountain Institute, a nonprofit environmental research and consulting organization. But since bitcoin isn’t owned by a single company, that change would require nearly all of the parties involved in its maintenance to agree on a change.
Changing the way bitcoin is mined “is a bit unwieldy and unworkable because it will require some consensus among all the holders of bitcoin, or for them to start trading different currencies,” Natali said.
Investors bet on rapid ECB rate cuts as economic outlook darkens
Markets are pricing in six rate reductions in the eurozone next year
Investors are betting that the European Central Bank will lead the way among big central banks in cutting interest rates next year, in a sign that many money managers think officials have already raised rates too far in their battle to tame inflation.
Traders in swaps markets are pricing in a high likelihood of the first cut in the ECB’s deposit rate of 4 per cent by March, and close to six quarter-point cuts by the end of the year, a steep increase from three or four cuts priced in late November.
The shift in expectations reflects a recent easing in inflation, but also investors’ nervousness about Europe’s darkening economic outlook, which intensified on Wednesday on much worse than expected German factory orders.
“The ECB is the most likely central bank to have overtightened — possibly significantly,” said Quentin Fitzsimmons, a senior portfolio manager at T Rowe Price. “Recession risks are being understated in the eurozone [which] has relied on very low interest rates for a very long time and had an enormously swift move to much higher policy rates.”
European policymakers are treading a fine line as inflation cooled to an annual rate of 2.4 per cent in November, the third consecutive downside surprise. But core inflation — which excludes energy and food to provide a better gauge of underlying price pressures — remains comfortably above the ECB’s 2 per cent target at 3.6 per cent, while the eurozone economy has been stagnant for most of the year.
Investors were this week encouraged to increase their bets on early ECB rate cuts by dovish comments from Isabel Schnabel, the most hawkish member of the central bank’s executive board, who said the “remarkable” fall in inflation made further rate rises “rather unlikely”.
Mark Wall, chief European economist at Deutsche Bank, expected inflation to continue to undershoot expectations in the coming months, creating “a risk that the first cut comes as soon as the March ECB meeting”.
The ECB is due to meet next week, when most economists expect it to lower its forecasts for both growth and inflation. Frederik Ducrozet, head of macroeconomics at Pictet Wealth Management, said this was likely to bolster investors’ belief that rates will soon fall, even if ECB president Christine Lagarde does not declare victory over inflation.
“The moment you say you aren’t going to hike again, that means the next move is a cut and opens the door to investors speculating on how soon that will happen,” said Ducrozet.
While traders have been increasing wagers for rate cuts by most major central banks in recent weeks, the moves have been most dramatic for the ECB, which started raising rates four months after the Federal Reserve and was previously expected to be among the last to start lowering rates.
“There’s a very good chance in 2024 that we will start talking about Europe in the same way we did in 2019, a region characterised by chronically insufficient aggregate demand,” said Ralf Preusser, global head of G10 rates at Bank of America.
He added that the US was a “different story”, given the relative strength of the economy.
Investors are currently pricing in the first rate cut for the Federal Reserve in May and five cuts by the end of the year. In the UK, traders expect the Bank of England to move in June with around three cuts priced over 2024.
“While global growth has generally held up better than we had anticipated at the start of 2023, that can’t be said for the eurozone,” said Mike Riddell, a bond portfolio manager at Allianz Global Investors. “We expect European and global growth to head much weaker over the next half year too, as all the rate hikes begin to really bite.”
Brown-Forman misses by $0.01, misses on revs (60.23)
- Reports Q2 (Oct) earnings of $0.50 per share, $0.01 worse than the FactSet Consensus of $0.51; revenues rose 1.2% year/year to $1.11 bln vs the $1.15 bln FactSet Consensus.
- Fiscal 2024 Outlook
- While co remains optimistic about prospects for growth of organic net sales and organic operating income in fiscal 2024, evolving global macroeconomic conditions continue to create a challenging operating environment tempering expectations. Accordingly, co now expects the following in fiscal 2024:
- Organic net sales growth in the 3% to 5% range as co maintains belief that the strength of our portfolio of brands and our pricing strategy will deliver growth.
- Based on the above organic net sales growth outlook and expectation that continued input cost pressures will be partially offset by lower supply chain disruption costs, co anticipates organic operating income growth in the 4% to 6% range.
- Co continues to expect fiscal 2024 effective tax rate to be in the range of approximately 21% to 23%.
- Capital expenditures are planned to be in the range of $250 to $270 million
- While co remains optimistic about prospects for growth of organic net sales and organic operating income in fiscal 2024, evolving global macroeconomic conditions continue to create a challenging operating environment tempering expectations. Accordingly, co now expects the following in fiscal 2024:
Seagen announces data from the Phase 3 HER2CLIMB-02 clinical trial of TUKYSA in combination with the antibody-drug conjugate ado-trastuzumab emtansine (215.83)
The combination showed a statistically significant improvement in progression-free survival, the study's primary endpoint, in patients with unresectable locally advanced or metastatic human epidermal growth factor receptor 2-positive breast cancer who had been previously treated with trastuzumab and a taxane, compared to those who received placebo plus ado-trastuzumab emtansine. Discontinuations due to adverse events were more common in the combination arm of the trial, but no new safety signals were observed for the combination.
Research Calls I
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Upgrades:
- AutoZone (AZO) upgraded to Strong Buy from Outperform at Raymond James; tgt raised to $3100
- Builders FirstSource (BLDR) upgraded to Buy from Neutral at B. Riley Securities; tgt raised to $177
- Capital One (COF) upgraded to Buy from Neutral at BofA Securities; tgt raised to $129
- Camtek (CAMT) upgraded to Buy from Neutral at B. Riley Securities; tgt raised to $75
- Devon Energy (DVN) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $58
- Discover Financial Services (DFS) upgraded to Buy from Neutral at BofA Securities; tgt raised to $116
- Genmab (GMAB) upgraded to Buy from Neutral at UBS
- Jack Henry (JKHY) upgraded to Buy from Neutral at BofA Securities; tgt raised to $186
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Downgrades:
- Asana (ASAN) downgraded to Reduce from Hold at HSBC Securities; tgt $18
- BRF SA (BRFS) downgraded to Neutral from Overweight at JP Morgan
- EOG Resources (EOG) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $150
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Others:
- Advanced Energy (AEIS) initiated with a Neutral at Seaport Research Partners
- Agilon Health (AGL) initiated with a Mkt Outperform at JMP Securities; tgt $18
- AGNC Investment (AGNC) resumed with a Neutral at UBS; tgt $9
- AG Mortgage Investment Trust (MITT) initiated with a Buy at UBS; tgt $7
- Annaly Capital Mgmt (NLY) resumed with a Neutral at UBS; tgt $19
- AMN Healthcare (AMN) initiated with a Mkt Outperform at JMP Securities; tgt $85
- Angel Oak Mortgage REIT (AOMR) resumed with a Neutral at UBS; tgt $10
- Apollo Commercial Real Estate (ARI) initiated with a Neutral at UBS; tgt $10.50
- Ares Commercial Real Estate (ACRE) initiated with a Neutral at UBS; tgt $10.50
- ARMOUR Residential REIT (ARR) initiated with a Neutral at UBS; tgt $18.50
- AvidXchange (AVDX) initiated with a Buy at BTIG Research; tgt $14
- Blackstone Mortgage Trust (BXMT) initiated with a Neutral at UBS; tgt $23.50
- Chimera Investment (CIM) initiated with a Neutral at UBS; tgt $5.50
- Cross Country (CCRN) initiated with a Mkt Perform at JMP Securities
- Digital Realty Trust (DLR) initiated with a Sector Weight at KeyBanc Capital Markets
- Ellington Financial (EFC) initiated with a Neutral at UBS; tgt $13.50
- Ellington Residential Mtg (EARN) initiated with a Neutral at UBS; tgt $6
- Equinix (EQIX) initiated with a Sector Weight at KeyBanc Capital Markets
- Essent Group (ESNT) initiated with a Neutral at UBS; tgt $54
- Evolent Health (EVH) initiated with a Mkt Outperform at JMP Securities; tgt $37
- Enact Holdings (ACT) initiated with a Neutral at UBS; tgt $29
- Granite Point Mortgage (GPMT) initiated with a Buy at UBS; tgt $6.50
- HealthStream (HSTM) initiated with a Mkt Perform at JMP Securities
- Invesco Mortgage Capital (IVR) initiated with a Neutral at UBS; tgt $8
- Lightspeed (LSPD) initiated with a Neutral at Redburn Atlantic; tgt $17
- loanDepot (LDI) initiated with a Neutral at UBS; tgt $2
- Mr. Cooper Group (COOP) initiated with a Buy at UBS; tgt $80
- MFA Financial (MFA) initiated with a Neutral at UBS; tgt $12
- MGIC Investment (MTG) initiated with a Neutral at UBS; tgt $18.50
- Nintendo (NTDOY) initiated with a Buy at MoffettNathanson
- NMI Hldgs (NMIH) initiated with a Buy at UBS; tgt $36
- Shift4 Payments (FOUR) initiated with a Sell at Redburn Atlantic; tgt $49
Gapping up
In reaction to earnings/guidance:
In reaction to earnings/guidance:
- S +16.5%, PHR +14.6%, OLLI +8.2%, KFY +6.6%, SFIX +4.1%, POWL +2.8%, TOL +1.9%, CPB +1.6%, THO +1%
Other news:
- PHVS +96.6% (announces positive top-line phase 2 data from the chapter-1 study of Deucrictibant for the prophylactic treatment of HAE attacks; announces pricing of offering of 11.125 mln shares of common stock at price of $24/share)
- ASPN +15% (announces award for its PyroThin EV segment; provides update on its DoE loan)
- EYPT +5.7% (prices offering of 11764706 shares of its common stock at $17.00 per share)
- CHRS +4.5% (Presents Phase 1/2 Clinical Data on Casdozokitug a First-in-Class IL-27-Targeted Antibody at the 2023 ESMO Immuno-Oncology Congress)
- CAR +4.5% (declares special dividend of $10.00 per share)
- RCM +3.5% (announced that it has entered into a definitive agreement to acquire Acclara)
- RYTM +3.2% (Announces Updates on MC4R Pathway Programs at R&D Event)
- ATAT +3% (prices secondary offering of 9.6 mln shares of common stock at $15.80 per share)
- NBIX +2.8% (FDA approves Breakthrough Therapy Designation for Crinecerfont)
- SPHR +2.5% (announces pricing of $225 million offering of convertible senior notes)
- BTBT +2.1% reports monthly production update for November)
- RIO +2% (updates progress in its portfolio for the future)
- IGMS +2% (announces strategic pipeline prioritization; to cut its workforce by 22% extends cash runway into 2Q26)
- STRL +1.8% (authorizes new $200 mln share repurchase program)
- NTB +1.7% (authorizes new $90 mln share repurchase program)
- IREN +1.6% (announces monthly investor update for November 2023; Bitcoin mined of 369)
- SIG +1.5% (files mixed shelf securities offering) EU +1.5% (enters $70 mln transaction with Boss Energy)
- RLGT +1.3% (authorizes new 5 mln share repurchase program)
- MSBI +1.1% (authorizes new $25 mln share repurchase program)
- NVAX +1.1% (updated COVID-19 vaccine now authorized in Canada)
Analyst comments:
- BLDR +3.8% (upgraded to Buy from Neutral at B. Riley Securities)
- COF +1.8% (upgraded to Buy from Neutral at BofA Securities)
- DFS +1.7% (upgraded to Buy from Neutral at BofA Securities)
Gapping down
In reaction to earnings/guidance:
In reaction to earnings/guidance:
- YEXT -15.8%, ASAN -15.8%, BOX -13.2%, INMD -10.7% (guidance), BTI -8.1% (guidance), OOMA -7.1%, MDB -5%, DSGX -2.8%, UNFI -2%, PLAY -1.7%
Other news:
- FLNC -10.5% (files for 18 mln share offering by selling shareholders)
- IXHL -6.1% (provides update on IHL-42X Drug Candidate in Phase 2/3 Clinical Trial in Obstructive Sleep Apnea)
- CRDO -3.9% (prices offering of 10.0 mln shares of common stock at $17.50 per share)
- FIVN -2.5% (responds to market rumor confirms it was approached but is not pursuing any such acquisition)
- VYGR -1.9% (has selected a lead development candidate for its superoxide dismutase 1-mutated amyotrophic lateral sclerosis gene therapy program)
Campbell Soup beats by $0.04, reports revs in-line; reaffirms FY24 EPS guidance, revs guidance (40.37)
- Reports Q1 (Oct) earnings of $0.91 per share, excluding non-recurring items, $0.04 better than the FactSet Consensus of $0.87; revenues fell 2.9% year/year to $2.5 bln vs the $2.52 bln FactSet Consensus.
- Sales decreased 1% on an organic basis.
- Adjusted gross profit margin declined 10 basis points to 32.1% and was primarily driven by unfavorable volume / mix, with net price realization, supply chain productivity improvements and cost savings initiatives offsetting higher cost inflation and other supply chain costs.
- Co reaffirms guidance for FY24, sees EPS of $3.09-$3.15 vs. $3.07 FactSet Consensus; sees FY24 revs of $9.31-$9.49 bln vs. $9.44 bln FactSet Consensus. Sees organic net sales growth of 0-2%