A Bitcoin ETF (BTC) that claims to be green is coming to life in Brazil. However, the players are going down a controversial path, that of carbon offsetting, in an attempt to align the king of cryptos with current environmental issues.
A green Bitcoin ETF: greenwashing or real ecological will?
Investment firm Hashdex Asset Management has just launched the first Bitcoin exchange traded fund (ETF) with green credentials in Brazil. It offers 100% exposure to Bitcoin, while committing to carbon neutrality.
This is the second authorized Bitcoin ETF in the country, tracking the QR CME CF Bitcoin Reference Rate (QBTC11). The German Crypto Carbon Ratings Institute will be responsible for publishing annual reports in terms of energy consumption and carbon emissions, related to the creation of Bitcoin acquired through this green Bitcoin ETF.
This data will allow Hashdex to invest in carbon credits and green technology. One carbon credit is a unit equivalent to 1 ton of CO2 avoided or sequestered. The investment rate will be estimated at 0.15% of its liquid assets each year.
The fund was launched on the Brazilian B3 stock exchange in the first week of August, under the ticker “BITH11”.
Hashdex is not the only company to have committed to carbon offsetting. On August 3, global investment firm SkyBridge Capital joined forces with carbon credit provider MOSS Earth. SkyBridge Capital has purchased the equivalent of 38,436 tons of carbon offsets.
Crypto ETFs: Gap to be bridged between the US and Brazil
Brazil now has 4 cryptocurrency-related ETFs, a market dominated by Hashdex and QR Asset Management.
Hashdex had issued its first regulated crypto ETF, the Hashdex Nasdaq Crypto Index (HASH11), in April 2011. This ETF replicates the performance of the Nasdaq Crypto Index (NCI) and tracks a notional basket of several major cryptocurrencies, such as Bitcoin, Ethereum (ETH), Chainlink (LINK), Bitcoin Cash (BCH) and Stellar Lumens (XLM). Hashdex also offers a weighted fund, the Nasdaq Crypto Index following Bitcoin and the Bitcoin Risk Parity Gold Fund.
In addition, the Brazilian Securities Commission (CVM) approved a 100% Ethereum ETF in Latin America in July 2021, launched by QR Asset Management.
In the United States, Victory Capital Holdings is the latest to take a chance on a crypto ETF, filing an application with the U.S. SEC. Commission Chairman Gary Gensler recently gave renewed hope in an interview for an upcoming Bitcoin ETF in the U.S., including exchange-traded funds focused exclusively on Bitcoin futures on the Chicago Mercantile Exchange (CME).
Bitcoin is receiving unequal treatment in different countries. Canada has led the way in Bitcoin ETFs and Brazil is following suit, while the SEC is playing catch-up in the United States, unlike its neighbor to the north. Gensler has recently raised some hopes of a breakthrough in this area, but nothing concrete at this stage.
