Bitcoin Runs Into ESG Price Brick Wall

Bitcoin, the heavyweight of the cryptocurrency world, has had a relatively tough time recently – following the extraordinary price surges of the early part of the year. The currency is currently trading at just under $45,000 after highs of $64,000.

For anyone holding out for a fresh rally in Bitcoin before purchasing their Tesla Model 3 with the cryptocurrency, you’re too late. Elon Musk, crypto’s most powerful meme lord, and CEO of Tesla, last week scrapped the option for Bitcoin holders to pay for their car with it. It looks like he may have also sold all of Tesla’s substantial holdings in Bitcoin (or maybe not).

Why? Because Bitcoin is bad for the environment, Musk says, and prompting greater demand for fossil fuels. Even when generated via renewable energy, owing to the sheer volume of electricity mining and validating transactions requires, it is not suitable at present, says the some-times world’s richest person.

Musk’s change of tack doesn’t ring true when viewed as a road to Damascus moment. As a smart, well-informed person he almost certainly knew about crypto’s energy problem. So what could be the reason?

ESG. Few outside of finance know, but it is one of the most powerful and lucrative acronyms in history. Today it’s seldom off of the lips of those in financial circles for long. Environmental, Social, Governance factors are now used to screen everything from investments to loans. Falling on the wrong side of ESG has serious potential pitfalls. ESG powers investment funds and indices. Those stocks with bad ESG scores increasingly don’t make it into portfolios. 

While institutional investors are indeed expanding their interest in crypto, from a very low base, the momentum is nothing like as powerful as that which powers ESG. If crypto’s reputation for lacking in this regard increases, it’s clear where investors will stay firm when caught between the two.

Historical Performance And IFISA Process Guide

  • Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). 

That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.

  • Money&Co. has been lending for over 5 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.

All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.

So here’s our guide to the process:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.

Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.

Risk: Security, Access, Yield

Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.