Asset managers of cryptocurrency exchange traded funds (ETFs) in Canada are channeling fees into carbon offsets to help ease concerns about energy intensive digital coins and tokens.
Purpose Investments is set to launch new “carbon neutral” classes of its Bitcoin and Ethereum ETFs next week. The Toronto-based firm managing more than $12 billion in assets says the new securities are expected to begin trading on the Toronto Stock Exchange on November 9, under the ticker symbols “BTCC.J” and “ETHH.J,” respectively.
In August, Calgary-based Accelerate Financial Technologies announced a carbon-negative ETF that uses up to 10% of the fund's 69 basis point management fee to plant trees. In May, Toronto-based Ninepoint Partners said it would partner with software firm CarbonX to buy carbon credits for its Bitcoin ETF using an undisclosed portion of management fees.
The new, greener investment options come as cryptocurrency asset firms push back against claims of excessive energy use. The debate is heating up this week as world leaders gather in Glasgow, Scotland for the 2021 United Nations Climate Change Conference.
A report released on Monday backed by Coinbase and other cryptocurrency companies warns policymakers not to “throw the digital baby out with the climate bathwater,” touting the value of digital ledger technology for facilitating sustainable and inclusive finance.
Cryptocurrency mining activity has increased in the U.S. and Canada after the Chinese government crackdown on cryptocurrencies earlier this year. In New York, lawmakers are considering a bill that would ban the use of fossil fuels to mine Bitcoin.
Analysts at Bank of America recently put Bitcoin's energy global consumption on par with American Airlines (NASDAQ:AAL), which flies over 200 million passengers in a typical year.
Purpose has revealed plans for a suite of new cryptocurrency focused funds since launching in February North America's first ETF designed to track the price of Bitcoin.
The price of Bitcoin soared to a fresh all-time high in October amid excitement over the first U.S. Bitcoin futures ETF starting to trade on the New York Stock Exchange.
Rising prices incentivizes more mining, a process that requires increasingly powerful computers solving increasingly challenging mathematical problems.
