Canada-based alternative investment manager Ninepoint is to set aside a portion of its management fees to offset the carbon footprint of the Bitcoin held in an exchange-traded fund it operates.
Its aim to provide investors prioritizing environmental, social and governance investment opportunities with carbon-neutral exposure to the world’s biggest cryptocurrency.
Cryptocurrencies have attracted considerable criticism in some quarters over the large amounts of electricity that are required to run the huge computer farms that mine them.
Ninepoint’s effort to address those concerns involves a partnership with Toronto-headquartered environmental software fintech firm CarbonX, which provides carbon emission analysis and carbon offsetting services.
CarbonX and The Crypto Carbon Ratings Institute, which conducts scientific estimates of the energy consumption and environmental impact of cryptocurrencies, will provide carbon footprint analysis and carbon-offsetting solutions for Ninepoint’s Bitcoin ETF using carbon offsets from projects such forest conservation schemes in the Amazon that mitigate the release of carbon dioxide into the atmosphere and which contribute to the United Nations’ sustainable development goals.
“Our view is that some of the fears around Bitcoin’s carbon footprint are a bit misguided,” said Ninepoint Managing Director of Digital Assets Alex Tapscott in an interview with Forkast.News. “It turns out that almost half of the energy input for the network actually comes from renewables, but half of the big number is still a big number.
“Until Bitcoin is 100 percent renewable, we think those in the asset management industry can take concrete steps to try and mitigate the footprint and make it easier for all kinds of investors to get exposure,” he added.
All costs of offsetting the carbon footprint of the ETF will be paid by Ninepoint from its management fee, not by fund holders.
Prior to its unitholder-approved conversion into an ETF, Ninepoint’s Bitcoin fund was a closed-end investment fund with more than US$300 million of assets. The ETF trades on the Toronto Stock Exchange.