Analyst: What Exxon's Foray Tells Us About 'Convergence' Between Bitcoin Mining And Energy Production

An analyst with Cathie Wood’s Ark Invest said the convergence between Bitcoin (CRYPTO: BTC) and energy production is set to accelerate.

What Happened: The recently reported Exxon Mobil Corp (NYSE: XOM) pilot program involving Bitcoin mining from flared natural gas could “become a crucial and economically beneficial strategy” as oil and gas producers attempt to meet ESG standards demanded by many investors, Ark analyst Yassine Elmandjra said in a note.

“Bitcoin’s ability to incentivize the discovery of cost-efficient energy sources, independent of location and consumer demand, has profound implications for energy infrastructure,” wrote Elmandjra.

See Also: How To Buy Bitcoin (BTC)

Why It Matters: The analyst noted that such mining not only captures natural gas that would have otherwise been flared but will also encourage investment in solar and wind, thus “increasing the share of renewable energy provisioned to grids globally.”

Elmandjra referred to an agreement between Exxon and Crusoe Energy Systems to take gas from an oil well in the Bakken shale basin to power Bitcoin miners.

It was reported earlier that ConocoPhillips (NYSE: COP) is also using gas for Bitcoin mining in North Dakota.

Price Action: Exxon Mobil shares closed 2.8% lower at $82.81 in the regular session and were largely unchanged in the after-hours trading. At press time, Bitcoin traded 0.6% higher at $47,385.28, according to Benzinga Pro data.