Cryptocurrencies as offshore financial services, if lacking in political support simply implies absence of endorsement that is vital for sustainable investments. While secrecy is a trait common to both offshore and crypto investments, offshore jurisdictions have to comply with international anti-money laundering and anti-terrorism laws, as well as with global policies in order to attract traditional investors.
The adoption of cryptocurrencies as offshore investment products puts offshore regulators in a position in which they have to continuously update their legal framework. The need to keep pace with changes in technological developments is necessary to ensure that the integrity of their international financial services and products is not undermined by market manipulators
On the other hand, cryptocurrencies in the world of investments, will find it difficult to make their way into the mainstream operations of big corporate organization. This is in light of the global movement to address the effects of climate change. The movement includes obligating big corporations to integrate and adopt sustainable and environment friendly practices, which cryptocurrencies like Bitcoin cannot offer.
Today, the most popular and sought after funds are the so-called ESG funds, which are a type of mutual funds in which the selection of securities focus mainly on corporate organizations highly rated for their ESG initiatives.
How Do ESG Funds Affect the Viability of Crypto Assets as Investment Options?
The ESG acronym stands for Environmental, Social and Governance indicators, by which corporations are rated based on their levels of support for the global movement in the battle against the effects of climate change. ESG mutual funds limit their stock investments on companies committed to reduce greenhouse gas emissions, improve social conditions and adopt policies for sustainable operations
Where part of the goal of ESG is to help achieve the global goal of attaining zero CO2 emissions, companies who accept or buy bitcoins and altcoins, immediately lack qualification for the ESG standards. The blockchain technology with which crypto miners work to solve encryptions is energy intensive. Crypto mining sites have been identified as among the largest users of CO2-emitting fossil fuel.
Sustainability of ESG Assets vs. Digital Assets
While the price of bitcoin surged to reach an all time high of $63K sometime this year, it was due to the participation of traditional investors in the buying activities. However, the value of the digital asset started to dwindle and dropped, down to prices that immediately spelled huge losses for a number of investors.
Many traditional investors learned that in not meeting the ESG rating, their viability in the securities market can be affected. Whales also affected the sustainability of bitcoins, as many bought billions worth of the digital coin to push the price index higher; only to dump their bitcoins later after determining the huge profits they stand to gain from the fluctuating prices of bitcoin.
Market analysis of stock performances revealed that the stocks of highly rated ESG corporations are the most resilient and steadfast under any kind of economic conditions. However, it should be understood that the performances of ESG shares are not based on individual trading but for being the stocks chosen by mutual fund providers. Einvestment Offshore Fund as an example, applies the principles of sustainability when investing the funds entrusted by users of their online investment platform.Read More