Jacobi’s Bitcoin ETF Designated as ‘Environmental Investment’ by Issuer

The European market’s inaugural spot Bitcoin exchange-traded fund (ETF) has made history once again. The ETF, launched by London-based Jacobi Asset Management, has been classified as an Article 8 fund under the European Sustainable Finance Disclosure Regulation (SFDR). Article 8 classification is reserved for funds that “promote environmental and/or social characteristics.”

Breaking the news on August 29, Bloomberg reported that Jacobi Asset Management had labeled its creation, the Jacobi FT Wilshire Bitcoin ETF, as an Article 8 fund. The ETF, which debuted on the Euronext Amsterdam stock exchange on August 15, stands as Europe’s maiden Bitcoin ETF and is also the first to conform to the European Union’s environmental, social, and governance (ESG) investment guidelines.

Martin Bednall, the CEO of Jacobi, lauds the ETF as “fully decarbonized,” attributing this status to its partial investments in renewable energy certificates (RECs). Nevertheless, academics consulted by the news outlet have raised concerns about a seeming contradiction. Given Bitcoin’s known energy-intensive mining process, the ETF would theoretically require an excessive volume of RECs to offset the energy consumed by its Bitcoin holdings. In essence, the purchase of such a high volume of RECs could surpass the energy consumption of the fund’s underlying Bitcoin assets.

The Jacobi FT Wilshire Bitcoin ETF’s launch comes over a year later than initially planned in 2022. Marketed as the primary physically-backed Bitcoin fund, the ETF offers investors an avenue to engage with a financial product backed by actual BTC holdings.

From the outset, Jacobi Asset Management has highlighted the ETF’s environmentally conscious design. The fund employs external data to estimate the energy consumption of the Bitcoin network, subsequently purchasing and “retiring” renewable energy certificates. These certificates are recorded on a blockchain platform, enabling investors to verify the fund’s environmentally friendly commitments.

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