One River, the digital asset hedge fund backed by British billionaire Alan Howard, has today (24 May) filed Form S-1 with US SEC to create a bitcoin exchange-traded fund. The performance of the index is designed to reflect the performance of bitcoin in U.S. dollars on a carbon-neutral basis. The fund with name official name “One River Carbon Neutral Bitcoin Trust” will issue common shares of beneficial interest that trade on the NYSE.
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Coinbase Custody Trust Company, LLC the subsidiary of Coinbase, Inc., will act as the is the custodian for the Trust, and will hold all of the Trust’s bitcoin. As the Index is calculated as a price return, it does not track forks or airdrops involving bitcoin. The ETF intends to purchase MCO2 tokens representing certified reductions in greenhouse gas emissions. MCO2 tokens are issued under verified carbon standard and each token represents 1 carbon credit from an environmental project (forestry, energy, biomass, etc).
The Trust’s investment objective reads as follows:
"The Trust’s investment objective is to seek to track the performance of bitcoin, as measured by the Index, adjusted for the Trust’s expenses and other liabilities. In seeking to achieve its investment objective, the Trust will hold bitcoin and will value its Shares daily as of 16:00 Eastern time (“EST”) using the same methodology used to calculate the Index, as adjusted to reflect the expenses associated with the offsetting carbon credits."
One River is not alone in this. Earlier this month, Canada-based Ninepoint Partners launched its Bitcoin ETF which will use a portion of its management fee to offset the carbon produced by the Bitcoin held in the ETF.
A few days back, crypto exchanges BitMex and FTX announced donations to offset carbon footprints. The exchanges would donate at least $0.0026 for every $1 of blockchain fees paid by the clients. The initiatives come in at a time when there is an increased debate on the carbon footprint left by Bitcoin mining. Last week, Tesla announced a reversal of its decision on accepting Bitcoin as a mode of payment due to the environmental impacts posed by mining.