While the United States is delaying the approval of a cryptocurrency exchange-traded fund, Canada, its neighbor, is leading the way in cryptocurrency ETF adoption. On the Toronto Stock Exchange, approximately 25 cryptocurrency ETF tickers are already trading.
Accelerate Financial Technologies Inc. announced the launch of the world’s first carbon-negative Bitcoin ETF – Accelerate Carbon-Negative Bitcoin ETF (“ABTC”) – on Tuesday.
According to the firm’s official press release, the ETF seeks to provide investors with exposure to the performance of bitcoin by investing in derivatives that provide exposure to bitcoin, and it intends to sequester more than 100 percent of the estimated carbon dioxide emissions attributable to Bitcoin transactions to which it is exposed by funding decarbonization initiatives.
Accelerate intends to accomplish this by planting 3,450 trees for every $1 million CA ($788,200 US) invested in the Accelerate Carbon-Negative Bitcoin ETF (TSX:ABTC). According to the company, each batch of trees planted will sequester 1,000 tons of CO2.
Accelerate’s Founder and CEO, Julian Klymochko, stated that the fund’s goal is to provide an investment vehicle that will alleviate investor concerns about Bitcoin’s high energy consumption.
“Investors are concerned about environmental, social, and governance (“ESG”) issues. “Historically, bitcoin has had a mixed track record from an ESG perspective,” he said, adding, “Accelerate changes this negative environmental outcome by offering a way to obtain exposure to bitcoin while benefiting the environment.”
So far, ETFs launched in Canada have had strong performance on the stock exchange. Since the first ETF was approved in February of this year, both Ethereum and Bitcoin-backed ETFs have performed well. The Ether Fund’s ETFs, QETH.UN and QETH.U, ranked first and third in weekly trading volumes after increasing 7.69 percent and 6.69 percent, respectively, while 3iQ CoinShares Ether ETF (ETHQ) ranked second with a 6.77 percent increase in volume traded.
Notably, according to TMX Money data, all Ethereum-based ETFs outperformed Bitcoin-based ETFs in the previous week. Purpose Bitcoin ETF (BTCC.B), the first ETF approved, ranked 19th in terms of trading volume after falling 1.66 percent in the previous week.
Furthermore, Canada is establishing itself as a hotspot for cryptocurrency adoption. The country, which has been mentioned as a strong contender for Bitcoin mining dominance, has everything it takes to become just that. According to the Canada Energy Regulator, Quebec – a Canadian province – generated 213.7 TWh of electricity in 2018, with hydropower accounting for 95 percent of that total. This is enough renewable energy to power the entire Bitcoin network, which consumes approximately 129 TWh.
The Canadian government is also investigating several applications for blockchain technology. More crypto-friendly regulations are the final piece of the puzzle for cryptocurrency adoption to flourish in the country. With more favorable regulations for the sector, Canada is bound to lag behind the United States in the race for cryptocurrency innovation and adoption.