Canadian alternative investment manager Ninepoint Partners has unveiled a directly backed, carbon-neutral bitcoin ETF.
Ninepoint Partners will use a portion of the ETF’s management fee to offset the carbon produced by the fund’s bitcoin.
The Ninepoint Bitcoin ETF is available to trade on Toronto Stock Exchange through US dollar (BITC.U CN) or unhedged Canadian dollar (BITC CN) share classes.
The ETF was created by converting one of Ninepoint’s bitcoin-tracking closed-end funds and, as such, already houses some $270 million in assets.
John Wilson, co-CEO and Managing Partner at Ninepoint Partners, said: “In keeping with our commitment to investors to help them better diversify their portfolios, today we’re providing investors with an easier, more liquid way to invest in bitcoin that more efficiently tracks the underlying bitcoin price.”
The ETF, which is authorized as an alternative fund under local regulations, tracks movement in the world’s largest cryptocurrency as measured by the MVIS CryptoCompare Bitcoin Benchmark Rate Index. The index averages the US dollar price of bitcoin across five regulated crypto trading platforms noted for their oversight, efficiency, transparency, and integrity.
The ETF is fully backed by physically settled bitcoin, offering investors direct access to the digital asset without the inconvenience, technical challenges, and associated risks of self-custody within a digital wallet.
Bitcoin holdings are stored in a segregated cold storage system using a dual-custodian structure with Cidel Trust and Gemini acting as the fund’s bitcoin custodians.
The ETF comes with a management fee of 0.70%. Ninepoint will use a portion of this fee to offset the carbon footprint – a function of the energy-intensive blockchain mining process – of the bitcoin held in the portfolio. It does this by purchasing and retiring carbon credits commensurate with the CO2 inherent in the fund, as calculated by the Crypto Carbon Rating Institute.
The fund is the fifth directly backed bitcoin ETF to list in Canada this year. Other funds include the $800m Purpose Bitcoin ETF (BTCC.U CN), which comes with a management fee of 1.00%; the $400m 3iQ CoinShares Bitcoin ETF (BTCQ CN), also 1.00%; Evolve Funds’ $100m Bitcoin ETF (EBIT CN), 0.75%; and the $100m CI Galaxy Bitcoin ETF (BTCX.U CN), 0.40%.