In a recent development, Europe witnessed the launch of its inaugural physical Bitcoin exchange-traded fund (ETF) on the Euronext Amsterdam exchange, denoted by the ticker symbol BCOIN. This pioneering ETF, introduced by Jacobi Asset Management, arrived after more than a year of anticipation, with the company deferring the launch in 2022 citing unfavorable market conditions. However, the reception to the ETF’s unveiling in 2023 has been notably positive among investors.
Jacobi has advanced its approach by integrating an ESG (Environmental, Social, and Governance) label into its ETF. The purpose of this label is to amplify clarity concerning sustainable investment offerings. With asset managers, pension funds, and insurance companies working to combat deceptive green marketing tactics and instill investor trust in sustainability, the incorporation of the ESG label stands out. Martin Bednall, CEO of Jacobi, underscored that the ETF has been intentionally crafted with a primary emphasis on achieving full decarbonization.
Bloomberg-tracked information has revealed that this ETF, primarily centered on speculative investment in Bitcoin’s value, is the first instance of the EU’s environmental, social, and governance investing regulations being applied to such a financial instrument.
To support the ETF’s ESG classification, Bednall outlined plans to channel investments toward Renewable Energy Certificates (RECs). These certificates are intended to offset greenhouse gas emissions arising from the energy-intensive process of Bitcoin mining that the ETF tracks, indicating the company’s commitment to sustainable practices.
Nonetheless, worries regarding the ecological impact of Bitcoin mining persist. The energy consumption linked to the process has been extensively documented, and data from the Cambridge Center for Alternative Finance indicates that only 38% of mining operations incorporate sustainable energy sources. Expressing doubt, Anders Bjørn, a contributor to a 2022 piece on Renewable Energy Certificates (RECs) in the journal Nature Climate Change, remarked, “The assertion of achieving decarbonization can only be credible if Jacobi Asset Management can provide evidence that their acquisition of RECs genuinely translates into generating a comparable amount of renewable energy. Given their procurement of unbundled RECs to match Bitcoin mining-related electricity consumption, this seems improbable.”
