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Ninepoint Partners LP is trying to alleviate concerns about Bitcoin’s energy consumption by using a portion of the Crypto ETF’s management fee to offset the fund’s carbon footprint.
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“Some investors who are concerned about the carbon footprint of mining may be wary of investing in a Bitcoin ETF,” said Alex Tapscott, director of digital assets at the Toronto-based company, referring to the wide variety of options of computers around the world competing to validate Bitcoin transactions. “We create what we create to hope is a solution to this problem and gives you the choice of what you want and frankly what you need. “
Critics say Bitcoin’s environmental footprint has deteriorated while its price has skyrocketed. For example, Bank of America recently said that the energy consumption of the computer network that powers the digital coin is comparable to that of many developed countries and rivals that of major fossil fuel users and producers.
Ninepoint, which has approximately $ 6.5 billion in assets under management and institutional contracts, is partnering with fintech company CarbonX for environmental software to purchase carbon credits and support forest conservation projects. It also works with the Crypto Carbon Ratings Institute, which will work with CarbonX to conduct a carbon footprint analysis. Ninepoint did not disclose how much of the management fee would be contributed.
Ninepoint is not alone. One River Asset Management, whose crypto funds are backed by billionaire Alan Howard, said it developed a system that calculates the carbon costs of mining and buys loans to offset the impact. The company said it was building carbon neutrality into its existing Bitcoin and Ether funds and also plans to seek regulatory approval for an ETF with the same characteristics.
“This is very important to me – it will take a long time – and we need to find a way to ensure that Bitcoin can scale and realize its potential in a sustainable way,” Tapscott said over the phone.
Ninepoint’s Bitcoin ETF was converted from a trust to a fund on May 6th. The Bitcoin fund is physically secured and had assets of around $ 320 million when it was converted.
Canada was the first country to wear the ETF label for a Bitcoin product. In the US, the US Securities and Exchange Commission has not yet approved one, although at least 11 companies want to start one – nine of them have filed an application since the end of 2020 as crypto prices have risen sharply.
Click here to track US Bitcoin ETF filings through Bloomberg Intelligence.
– With the support of Claire Ballentine
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