Carbon neutral crypto spot ETFs to launch in Canada

Two carbon neutral cryptocurrency-backed exchange-traded funds are poised to launch in Canada offering a greener alternative for institutional investors.

Canada-based asset manager Purpose Investments is readying to launch two new crypto-based ETFs on the Toronto Stock Exchange on Nov. 9, both of which offer investors a carbon offset.

Purpose will launch their Bitcoin and Ethereum ETFs under the BTCC.J and ETHH.J tickers. Unlike the funds recently launched in the U.S. which are futures contract backed, these funds will be backed and settled using BTC as the underlying asset.

Tomorrow @PurposeInvest is launching new share classes for their #Bitcoin and #Ethereum ETFs -- $BTCC and $ETHH. They will be "Carbon Offset" share classes and will be denoted "/J". Pages below. pic.twitter.com/W9QYS4232U

— James Seyffart (@JSeyff) November 8, 2021

The Toronto-based firm has partnered with Patch, a firm that will help it measure the carbon footprint of the crypto portfolios and offer carbon-removal solutions. Measuring the carbon footprint of crypto mining is no easy task as there are so many variables, but the firm has detailed its efforts and the math in a whitepaper.

Purpose will then invest in vetted carbon offsetting projects with the aim to give clients carbon neutral exposure to BTC. Some of the projects it will invest in include direct air capture, biomass, mineralization or carbon dioxide removal, forestry, ocean fertilization, and soil management.

According to the firm's prospectus,Purpose's new BTC fund held 24,167 BTC (approx. $US1.6 billion) as of Nov. 8, while the Ether fund had 86,906 ETH (worth roughly $US417 million) as of Nov. 8.

Related: Green Bitcoin: The impact and importance of energy use for PoW

The Purpose Bitcoin ETF (BTCC-B.TO) was North America’s first Bitcoin fund launched in February. It currently has more than a million dollars in volume and has returned almost 20% over the past month according to Yahoo! Finance.

The Purpose Ethereum ETF (ETHH.TO) is not as popular with just $210,000 in daily volume but it has made a better return of 38% over the past 30 days.

The company also launched the first ETF that incorporates carbon offsetting in Europe in June. The fund trades on the London Stock Exchange under the ticker ZERO and tracks the S&P Global Clean Energy Select Index.