Industry Updates

Europe’s largest bitcoin ETP moves carbon neutral as investors ramp up demand for ESG

First crypto ETP to offset carbon emissions

Tom Eckett

Green bitcoin

ETC Group has responded to one of the biggest issues facing the cryptocurrency industry – sustainability – by offsetting the carbon emissions on Europe’s largest bitcoin exchange-traded product (ETP), the first cryptocurrency ETP to do so.

The crypto ETP issuer will offset the carbon footprint of the $577m BTCetc Bitcoin Exchange Traded Cryptocurrency (BTCE) through green projects provided by Swiss carbon offset specialists South Pole.

ETC Group will fund nature-based, carbon sequestration and renewable energy projects to offset all bitcoin-related Scope 3 emissions that have occurred since the launch of BTCE via HANetf in June 2020 along with any ongoing carbon emissions.

This will be funded by the firm within the total expense ratio (TER) – which is currently 2% – and no costs will be passed onto investors.

The firm said it will also join the Crypto Climate Accord which aims for the crypto sector to move towards low carbon mining and net zero by 2040.

Bradley Duke, co-founder and CEO of ETC Group, said: “Companies benefitting from cryptocurrencies like bitcoin are right to take meaningful steps to address climate concerns. We are pleased to see that bitcoin miners are increasingly sourcing renewable electricity, but we feel it is important to do more and act now.”

The move comes after Tesla founder and CEO Elon Musk’s negative comments on Twitter about the impact bitcoin mining has on the environment.

“We are concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which ahs the worst emissions of any fuel,” he said in one tweet. “Cryptocurrency is a good idea…but this cannot come at great cost to the environment.”

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It is well documented the energy intensive nature of bitcoin mining. Estimates from the University of Cambridge currently predict bitcoin uses 66 terawatt hours a year of energy which is more than Czech Republic and just under Austria and Colombia’s usage.

In a recent ETF Stream webinar on crypto ETPs, Duke said investors are increasingly doing due diligence on the sustainability of their investments.

“The fact remains bitcoin mining does require a lot of energy,” he continued. “There will be a proliferation of ETPs in the future that offset carbon emissions related to the mining of bitcoin.”

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