As Bitcoin Companies Make The Industry Green, Investors Will See The Light

As companies like Ninepoint and Greenridge have demonstrated, Bitcoin is going green. And this will attract more institutional investors.

Ninepoint Partners, a Toronto-based investment firm managing $8 billion in assets, and Greenidge Generation, a New York-based power provider and bitcoin mining company, have each announced that they will be using carbon offsets to compensate for any carbon emissions resulting from their operations, signaling the growth of a significant new trend for the industry.

Carbon offsets allow companies like Ninepoint and Greenidge to pay for a reduction in carbon dioxide emissions somewhere else to compensate for any carbon emissions resulting from their own business practices.

Greenidge Generation announced that it will offset all greenhouse gas emissions from its bitcoin mining operations by June 2021.

“Greenidge will purchase voluntary carbon offsets from a portfolio of U.S. greenhouse gas reduction projects,” according to a recent release. “Each project has been reviewed and certified by one of three well-recognized Offset Project Registries … ensuring that any projects funded by Greenidge reduce emissions or increase sequestration of greenhouse gas in a manner that is real, permanent, and verifiable.”

Meanwhile, Ninepoint will use a portion of its management fee to pay for 100% of offsets to compensate for any carbon produced by the mining of the bitcoin held in its exchange-traded fund (ETF).

Bitcoin Investors Want To Be Seen As Green

There’s no question that investors are looking for ways to show they are “green” and aware of the importance of environmental issues, especially climate change.

A recent survey by HSBC found that 43% of financial institutions are holding “green” bonds and 75 percent of financial managers are either already factoring social and environmental criteria into decision-making or are considering doing so.

Last year, the Swiss National Bank excluded coal miners from its equities portfolio. And recently, the Bank of Japan indicated that the need to take action on climate change was on its radar.

“Environmental, social and corporate governance (ESG) is one of the most important and fastest growing categories in the investment industry today,” Alex Tapscott, the managing director of Ninepoint’s digital assets group, told Bitcoin Magazine. “Many investors face a dilemma — they want to meet ESG standards but they also don’t want to limit themselves to what investments they can make. This is true for many asset classes, and bitcoin is no exception. Investors increasingly want real ESG solutions for their portfolios.”

How Carbon Offsets Compensate For A Company’s Carbon Emissions

As part of its carbon offset program, Ninepoint’s ETF is contributing to forest conservation projects in the Amazon. In addition to capturing some carbon dioxide through planting trees, these projects aim to help with economic development for people living in the region.

“We are working with CarbonX, who helps us identify projects that meet their strict approved standards,” Tapscott said. “That gives us comfort that when they enter the market for carbon offsets that a real difference is being made. Two of the projects are the Cordillera Azul National Park and the Tambopata-Bahuaja Biodiversity Reserve, both in Peru.”

Still, there could be room for making Bitcoin a cleaner industry. While offsetting the carbon it emits is a good start, reducing this carbon in the first place is another challenge.

“Carbon offsets alone are not a cure-all for Bitcoin,” explained Tapscott. “The most important thing is to decarbonize the mining process, something that is already well underway.”

Bitcoin Does Not Just Give Back To The Planet

Greenidge’s representative Michael McKeon sees the importance of carbon offsets, but also sees what the company is contributing to the community.

“The local community sees the value of the jobs we have created, the taxes we have paid and the impacts we have had on the local economy,” he told Bitcoin Magazine, adding that its facility also contributes power to the local grid.

Greenidge announced in March that it would be the first bitcoin mining firm with its own power plant to go public on the U.S. stock exchange.

“Our bitcoin mining capability is already best-in-class and seamlessly integrated with our electricity generation that powers thousands of homes and businesses,” Jeffrey Kirt, CEO of Greenidge Generation, said in a release. “By taking the bold and unique step of making our cryptocurrency mining fully carbon neutral immediately — as opposed to at some distant date in the future — Greenidge is once again leading in environmental efforts.”

As Bitcoin Gets Greener, More Investors Will Flood In

Though it’s easy to demonstrate the the legacy financial industry, as well as many other sectors in the world, are far more environmentally damaging than Bitcoin, the energy-intensive practice of Bitcoin mining has become a hot topic lately. But as the incentives around the practice enable larger shifts to renewable power, more institutional investors are likely to flood in.

“Offsetting is a real, substantive step that we believe will make a difference,” Tapscott said. “We hope that making Bitcoin greener will attract new investors to the asset class. In our view, Ninepoint’s efforts are a form of environmental self-monitoring. And our hope is others will follow.”


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Ninepoint To Fully Offset Carbon Footprint Of Its Bitcoin ETF

Canadian investment manager Ninepoint will invest management fees in forest conservation to offset the carbon footprint of its bitcoin ETF.

Ninepoint, a Canadian investment firm with $8 billion in assets under management, will offset the carbon costs of its bitcoin exchange-traded fund (ETF) using a portion of its management fee, according to a recent release.

“Bitcoin is both a rapidly growing asset class and increasingly important financial technology. We must all do our part to ensure Bitcoin grows in a more sustainable way,” said Ninepoint’s managing director of digital assets, Alex Tapscott, per the release. “Investors increasingly want real ESG solutions for their portfolios, while not sacrificing on diversification. I believe Ninepoint Bitcoin ETF offers the best of both worlds and could be a model for our industry.”

To offset the ETF’s carbon footprint, Ninepoint will be supporting various forest conservation projects in the Amazon. These programs offset the release of carbon dioxide into the atmosphere by planting trees that convert it into oxygen, and contribute to the United Nation’s sustainable development goals. Ninepoint is partnering with environmental software project CarbonX and The Crypto Carbon Ratings Institute to determine the ETF’s carbon footprint and how to offset it.

The Ninepoint Bitcoin ETF is the result of a recent unitholder-approved conversion from what was a closed-end investment fund that had over $300 millions in assets. Units of this bitcoin trust were converted to units of the ETF on a one-to-one basis.

Ninepoint’s initiative stems from the common assumption that Bitcoin mining is bad for the planet’s climate due to its extensive energy use and high carbon emissions. Though it is not the case that Bitcoin is bad for the planet, and Bitcoin does not waste energy. Rather, Bitcoin is key to an abundant, clean energy future and presents an opportunity to accelerate the global energy transition to renewables as well as promote programs like Ninepoint’s. 


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Canadian Bitcoin ETF issuer seeks ‘green BTC’

Ninepoint Partners LP, one of Canada’s Bitcoin (BTC) exchange-traded fund issuers, has announced plans to offset the carbon footprint of its BTC ETF product.

According to a release issued on Monday, Ninepoint has inked a partnership with carbon offsetting service provider CarbonX. As part of the partnership, Ninepoint will dedicate an undisclosed portion of its management fees to purchase carbon credits to neutralize the environmental impact of the Bitcoin mining process of the BTC held in its fund.

As previously reported by Cointelegraph, Ninepoint announced plans to convert its Bitcoin trust to an ETF back in March with the fund’s prospectus filed with regulators the following month.

The partnership will also see the Crypto Carbon Ratings Institute providing scientific estimates on Bitcoin mining energy consumption. The purchased carbon credits will reportedly be channeled towards conservation efforts in the Amazon forest.

Commenting on the reasoning behind the move, Alex Tapscott, managing director of digital assets at Ninepoint told Bloomberg:

“For some investors who are concerned about the carbon footprint of mining, they may be wary of investing in a Bitcoin ETF. What we’re doing is creating what we hope is a solution to that problem and giving them the choice that they want and, frankly, that they need.”

Indeed, the “ocean boiling narrative” continues to be associated with Bitcoin mining with detractors pointing to the high energy consumption of mining establishments around the world. Earlier in May, a bill was introduced to the New York State Senate seeking to ban BTC mining in the state for three years over energy concerns.

From China to Iran, miners are facing increasingly stricter oversight from regulators over electricity consumption and environmental impact concerns. On the flip side of the argument, Bitcoin proponents say miners are becoming buyers of last resort for renewable energy producers.