Bitcoin ETF issuer Ninepoint Partners will look to fully offset its carbon footprint
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- Ninepoint Partners announced plans to "fully offset" its carbon footprint Monday.
- The company said it will apply a portion of its management fee to the effort.
- The initiative comes amid a growing chorus of investors expressing concerns about the negative impact cryptocurrency mining has on the environment.
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Canadian bitcoin ETF issuer Ninepoint Partners announced Monday that it is planning to "fully offset" its carbon footprint, as it seeks to reassure investors concerned about the negative environmental impacts of cryptocurrency mining.
The Toronto-based company said it will apply a portion of its management fee towards becoming carbon neutral by partnering with CarbonX, an environmental fintech firm, and The Crypto Carbon Ratings Institute. Both will provide scientific estimates and analysis on bitcoin's carbon footprint.
The investment fund on May 6 completed its conversion of bitcoin trust from a closed-end investment fund into the ETF.
"Investors increasingly want real [environmental, social & governance] solutions for their portfolios, while not sacrificing on diversification," Alex Tapscott, managing director of digital assets at Ninepoint, said in a statement.
Ninepoint, which oversees approximately $8 billion in assets and institutional contracts, also said it is supporting various forest conservation projects in the Amazon specifically through this arrangement.
The rapid ascent of bitcoin, climbing 95% year-to-date thanks to increasing institutional adoption, has also been accompanied by a growing chorus of critics who point to the asset's mining-related carbon footprint. This includes prominent figures such as Bill Gates who has criticized bitcoin's electricity per transaction usage.
Bitcoin's carbon footprint is directly linked to its price. As the price increases, the bitcoin network has also become more complex to cope with the demand and prevent hacking.
"Given the relatively linear relationship between bitcoin prices and bitcoin energy use, it is perhaps no surprise that bitcoin's estimated energy consumption has grown over 200% in the past two years," Bank of America said in March.
More legislation is being introduced to address this. A bill on the floor of the New York State Senate is seeking to halt bitcoin mining for three years until the state has assessed its impact on the environment.
New York Senate Bill 6486 was presented by Senator Kevin Parker to the State Senate's Environmental Conservation Committee on May 4.