# ESG 8/2/23 By [Kintsugi Research](https://paragraph.com/@research.kintsugi) · 2023-08-02 --- KPMG released [a report](https://advisory.kpmg.us/content/dam/advisory/en/pdfs/2023/bitcoins-role-esg-imperative.pdf) describing bitcoin’s role in the ESG imperative representing a major narrative shift. **Tailwinds** We acknowledged the energy industry beginning to embrace bitcoin and ESG validation as a critical step on the path towards more institutional adoption in our [B34RM4RK3T](https://mirror.xyz/kintsugi.eth/z-SxlvvjKIigSnE1NKt0bgkg1MX5oSmWY__fUT26fSM) memo a year ago. It’s refreshing to see BTC finally taken seriously through an ESG lens: * Energy: renewable energy, demand response, recycled heat, and methane reduction * Social: Payments, financial inclusion, Ukraine fundraising, and access to energy in rural Africa * Governance: Bitcoin is a decentralized system that cannot be abused or misused by those in power or even individuals with ulterior motives. Tyler Cowen concluded in a [2020 follow-up](https://marginalrevolution.com/marginalrevolution/2020/12/why-did-the-great-stagnation-end.html) to his book on the [Great Stagnation](https://www.amazon.com/Great-Stagnation-America-Low-Hanging-Eventually/dp/0525952713/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=&sr=) with an observation: “The gains from truly mobilizing the internet may in fact right now be swamping all the accumulated obstacles we have put in the way of progress”. According to this chart from [Raoul](https://twitter.com/RaoulGMI/status/1685693079410409473), Crypto adoption is increasing at a similar rate as the internet was during a comparable phase in its adoption cycle -- and even relative to web2 companies which launched the gig economy, crypto protocols are superior for trustless, incentive aligned coordination of pseudonymous people online. ![](https://storage.googleapis.com/papyrus_images/47f15dd833392b7a082bf4e72143c7bb6e358034419c82d1307270630cf52bc7.png) But it’s not all sunshine and rainbows. **Headwinds** [Fitch downgrades US debt](https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023). Could be nothing …until it’s something. * US debt to GDP ratio [expected to reach 118%](https://www.bloomberg.com/news/articles/2023-08-02/us-fiscal-metrics-governance-spurred-cut-fitch-s-francis-says) by 2025 more than 2.5x the median for AAA rated companies * Fitch also cites an “erosion of governance” which was a factor in its rating ![](https://storage.googleapis.com/papyrus_images/f5bf7eae895b7ff5d050bb5adaa00a829ab214c8bfc022a78e91bdb8d5a7595a.png) [The fallout](https://hackmd.io/@LlamaRisk/BJzSKHNjn) of a [reentrancy exploit](https://mirror.xyz/cryptouf.eth/aLGsp37xFGqUXUrE5UYsGLsmeb0NOOA_T9D1Oy5nQOk) could devalue CRV and [threaten solvency](https://twitter.com/blockworksres/status/1686818314822275072) of top Defi protocols as Egorov races to [find buyers](https://blockworks.co/news/curve-egorov-exit-defi-positions) for his bags. ![](https://storage.googleapis.com/papyrus_images/64e374c78b9c57958ab44e5a945d9d253f4506fdf5aaf4e75eae87cad418587b.png) US DOJ still has Binance in its crosshairs. Allegedly hasnt filed charges due to concerns of a [run on the exchange](https://cointelegraph.com/news/us-doj-concerned-binance-run-prosecutors-fraud-charges). Crypto split in [two camps](https://twitter.com/adamscochran/status/1686792281716588544) on this one: Binance is either fine OR it’s totally insolvent. Macro ----- Earnings exceed expectations ![](https://storage.googleapis.com/papyrus_images/9063bfd1d4360b7659e12e33579d0eaee145613f02953458185afecc18e21a36.png) …and fund managers lever up to chase rally ![](https://storage.googleapis.com/papyrus_images/7b0dbc614b4c1bfed664564831cec4dfd189605d065d66d6199cececa3a059f8.png) Treasury to borrow $1.85 trillion in [Q3 and Q4 2023](https://www.bloomberg.com/news/articles/2023-07-31/us-treasury-boosts-quarterly-borrowing-estimate-to-1-trillion) Crypto ------ Bloomberg ETF analysts [increase Bitcoin ETF approval odds](https://twitter.com/JSeyff/status/1686707919696568320) ![](https://storage.googleapis.com/papyrus_images/b0eb429b0d305f9342b839965d01b6e1becddfbda1e8d10f554d4ad5dbf86e8a.png) …and 6 issuers filed Ethereum Futures ETFs [https://twitter.com/EricBalchunas/status/1686752210036604928](https://twitter.com/EricBalchunas/status/1686752210036604928) MKR and COMP led [rally in top Defi tokens](https://insights.glassnode.com/the-week-onchain-week-31-2023/) prior to CRV exploit ![](https://storage.googleapis.com/papyrus_images/fa97b0339e77f787ae3c5df4655597c71d5088f623a66d0b3a752fb21ddd8cbf.png) Crypto x Culture ---------------- Pixar, Adobe, Apple, Autodesk, and Nvidia form [Open Alliance](https://www.linuxfoundation.org/press/announcing-alliance-for-open-usd-aousd) for 3d content [Skulls of Luci](https://twitter.com/niftygateway/status/1686766753303670784) on NG Museum of Mahomes partners with D-O-M for [on chain sports collectibles](https://twitter.com/MuseumofMahomes/status/1686363582835941378) Lvcidia staking [season 2](https://twitter.com/lvcidia/status/1686881838428573696) Pudgy Penguin [international endcaps](https://twitter.com/LucaNetz/status/1685444665519050752) Other References ---------------- 1. [Decrypt: Mahomes launches new NFT collection](https://decrypt.co/148882/super-bowl-mvp-patrick-mahomes-launches-own-nft-platform) 2. [WSJ: Benefit of stocks over bonds is shrinking](https://www.wsj.com/articles/the-benefit-of-owning-stocks-over-bonds-keeps-shrinking-20528203) 3. [Arthur Hayes: Moai](https://entrepreneurshandbook.co/moai-da798c72a83b) 4. [TBL: Powell to bring the pain](https://thebitcoinlayer.substack.com/p/powell-to-bring-the-pain) 5. [Glassnode: Is DeFi Back in Business?](https://insights.glassnode.com/the-week-onchain-week-31-2023/) 6. [KPMG: Bitcoin’s role in the ESG imperative](https://advisory.kpmg.us/content/dam/advisory/en/pdfs/2023/bitcoins-role-esg-imperative.pdf) 7. [Linux Foundation: Open standards for 3d content](https://www.linuxfoundation.org/press/announcing-alliance-for-open-usd-aousd) 8. [78 charts to explain the economy](https://docsend.com/view/2wjtk88krcv2deky) 9. [Bank failure visualization](https://observablehq.com/@mbostock/bank-failures) 10. [Macro Compass: Pulse check on bond markets](https://www.dropbox.com/scl/fi/nkjewdqc8sw4cnptj7w3n/20230801051456_01_08__tmc_report__a_pulse_check_on_bond_markets.pdf?rlkey=6g9c38btaft9xzpsotyglsznx&dl=0) 11. [Macro Compass: What did you just say?](https://www.dropbox.com/scl/fi/lzx6oq1icnf27hzby6bp0/20230727041530_27_07__tmc_report__what_did_you_just_say.pdf?rlkey=oiya31k4erllltoj1iaasgvi7&dl=0) 12. [Not Boring: What happened in 2023](https://www.notboring.co/p/wtf-happened-in-2023) 13. [Fitch downgrades US debt](https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023) 14. [Macro Compass: US Downgrade, now what?](https://www.dropbox.com/scl/fi/21us4p4hwau1gpcuujr6v/20230802041900_02_08__tmc_report__us_downgrade___what_now.pdf?rlkey=e30g2pt5mpjnrlls55e2ulo7l&dl=0) 15. [Coinshares fund flows](https://blog.coinshares.com/volume-142-digital-asset-fund-flows-weekly-report-4e5e1ce458b2) --- *Originally published on [Kintsugi Research](https://paragraph.com/@research.kintsugi/esg-8-2-23)*