By Shelly Melancon (Switzerland)
Amidst the ongoing debate that surrounds the high energy consumption in Bitcoin mining, an asset manager intends to create an awareness for Bitcoin exchange trade funds (ETF). SEC filings reported that, One River Asset management has joined a list of firms that want to form their own Bitcoin ETF but with a huge catch. The plan is to buy carbon credit from digital asset funds which will be inclusive of the fund structure, with the hope that it will balance out finite energy usage in the Bitcoin ETF mining industry. It gives investors the opportunity to purchase into the ETF without going through rigorous process of trading Bitcoin. Apart from that holders of Bitcoin ETF don’t have to invest directly in Bitcoin. They need not worth about the complicated security procedures expected of cryptocurrency investors.
How Will it Work?
While filing, One River commented that carbon footprint linked with bitcoin will be balanced out by buying and retiring carbon credits required to account for the estimated carbon emissions. The firm intend to work with a carbon credit platform outside Uruguay called MOSS. MOSS’ MCO2 tokens will be bought by One River that are certified by Verra. The tokens are then encrypted.
Also read:What Are Tokenized Carbon Credits?
This token are contracted without a particular specimen stated, so it doesn’t represent a hold on a certain underlying carbon credit that is issued to a peculiar carbon reduction project. Initially the trust will purchase MCO2 tokens from the MOSS as it’s needed at a price negotiated before hand. The amount has to be enough to balance out the calculated carbon footprint of the bitcoins clasp in the trust portfolio with a notion towards tracking the index if the performance. In summary, one river will make use of non-fungible tokens to ascertain their carbon balance out to the shareholder.
Is The Filing For Carbon Neutral Bitcoin ETF Flashy or Move or Genuine Innovation?
Some people who aren’t s sure this is going to work out have criticized this effort. This effort has been made by Canadian ETF issuer Ninepoint, stating that the move was a stunt to cajole investors into choosing a more sustainable alternative over other options. Time will tell if One River’s ’s carbon offset initiative will leave a good impact or not. But till then, the ETF will need to hold on as the SEC analyes through millions of the dozens of Bitcoin ETF applications get to be answered.
Bitcoin, since reaching its peak price of $63,000 in mid-April, tumbled to as low as $31,000 in the most recent crash.
Back in March, Wood said that Bitcoin had much more room to grow. When Bitcoin’s market capitalization was still at $1 trillion, the fund manager went on a CBOE panel to say that “[o]ne trillion dollars is nothing compared to where [Bitcoin] ultimately will be.”
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