The first-of-its-kind spot Bitcoin ETF, stepping into the European arena, dubs itself as ‘environmental investing’ as announced by its issuer London-based Jacobi Asset Management. Introduced on the Amsterdam stock exchange on Aug 15 under the novel descriptor of an ‘Article 8’ fund, it is set to follow the European Union’s environmental, social and governance investing standards thereby marking a unique progression in the ETF market.
Martin Bednall, CEO of Jacobi vouches for the ETF’s ‘fully decarbonised’ status resulting from its investments in renewable energy certificates (RECs). Intriguingly, this has put forward a central paradox; the mining of Bitcoin, known for its intensive energy usage, would necessitate such a mammoth quantity of RECs that it would not only equate but also outpace the rate of energy consumed by the Bitcoin assets.
Striding past its planned launch in 2022, the Jacobi FT Wilshire Bitcoin ETF went live in August, offering investors a chance to finance in a product backed by actual Bitcoin. The eco-focused fund calculates the energy needs of the Bitcoin network and purchases and ‘retires’ RECs. Everything is tracked on a blockchain platform designed to help investors affirm the fund’s green guarantees.
However, the London-based asset management firm is not without challenges in its unique strategy. Viewing it as antagonistic to Bitcoin’s ‘controversial’ energy consumption, the critics express scepticism. Sustainability of the model prompts second-guessing due to the substantial quantities of RECs needed to match, let alone exceed, the total energy consumed to mine Bitcoin.
In a parallel development, as reflected in the accounts as of June 2023, Argo Blockchain, a crypto mining company, has managed to halve its debt to $75M, signifying a reduction of $68M in debts since June 2022. However, a drop in Bitcoin‘s value led to a 31% fall in revenues compared to H1 2022. Meanwhile, the company purportedly plans to bolster its hash rate capacity by introducing more than 1600 BlockMiner to its Quebec-based mining ventures.
These contrasting stories encapsulate the crypto market’s dynamism. While one sees potential for an environmentally-conscious approach, the other reels from detrimental market conditions. The real question here is not about successes or failures, but whether these extremes will carve new paths for others to tread or create cautionary tales for the wary investor.
Source: Cointelegraph
