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The environmental impact of Proof-of-Work (PoW) mining is driving a global push for regulation that could destabilize the largest PoW chains.

• Risk: Targeted Environmental Regulation (ESG). Governments and multilateral organizations are increasingly scrutinizing the energy consumption of Bitcoin and other PoW chains.

  • Policy Threat: Local or national bans, punitive taxes on energy usage by mining farms, or mandatory reporting requirements could force large-scale mining operations to migrate rapidly, causing unpredictable network instability and hash rate volatility.

  • Investor Pressure: Growing pressure from institutions on ESG (Environmental, Social, and Governance) principles could force large asset managers to divest from PoW-linked products, leading to market depression in those assets.