Crypto asset manager 7RCC becomes the latest entrant in the fiercely competitive race to list a spot Bitcoin exchange-traded fund (ETF) in the US. In its filing with the Securities and Exchange Commission (SEC), the company proposed a unique offering blending Bitcoin with carbon credits
Founded in 2021, 7RCC aims to provide access to crypto and blockchain-based assets for environmental, social, and governance (ESG) investors while addressing the concerns regarding Bitcoin’s carbon footprint.
7RCC Proposes Bitcoin Spot ETF That is Designed to Track the Performance of Bitcoin and Carbon Credit Futures
As per the S-1 statement filed on Monday, the proposed ETF is designed to track the performance of investing in a portfolio comprised of 80% Bitcoin (BTC) and 20% Carbon Credit Futures. The investment objective of the fund is to “reflect the daily changes of the price in Bitcoin and the value of carbon credit futures contracts”.
Speaking to crypto news outlet CoinDesk, the company’s CEO, Rali Perduhova, said they started preparations for a Bitcoin-focused ETF about 18 months ago but were waiting to get the right infrastructure in place to apply with the SEC.
This is the reason why 7RCC is entering the Bitcoin spot ETF race much later than its counterparts like BlackRock, Grayscale, and ARK 21Shares.
7RCC has assigned crypto exchange Gemini to serve as custodian for its tentatively named BTCK fund’s Bitcoin, while financial platform Tidal will assist in white-labeling the ETF.
Tidal manages over $8.5 billion worth of assets and has partnered with more than 54 ETF issuers. The company has assisted in the launch of 118 ETFs.
ESG-Focused Investment Gaining Traction Among Institutional Investors
In a press release, Gemini, the crypto-trading platform owned by the Winklevoss twins, said 7RCC’s BTCK ETF would let investors “balance the innovative nature” of Bitcoin with the “progressive realm” of Carbon Credit Futures. The statement claims that the spot Bitcoin ETF provides investors with an “integrated single-trade approach” to digital assets and environmental sustainability.
ESG investing has gained immense traction in recent years. The strategy encourages investors to adopt a socially responsible investment approach by focusing on assets that are aligned with the principles of climate change mitigation and diversity.
A study conducted by Harvard revealed that over 80% of US institutional investors plan to increase their allocations to ESG-focused products over the next two years. Reports also suggest that assets under management in ESG investments could cross $10 trillion by 2026.
As the Bitcoin and cryptocurrency market continues to evolve, ESG investing will start to become increasingly relevant. 7RCC’s spot Bitcoin ETF can also be seen as a move to attract ESG-oriented investors who have, until now, been deterred from investing in cryptocurrency-related products.
Bloomberg ETF analyst Nate Geraci expressed his enthusiasm for the filing. While sharing the news regarding 7RCC’s fund in an X post, he acknowledged the inevitability of an ESG-focused Bitcoin ETF and said that the industry will see “all types of permutations” on spot Bitcoin ETFs.
Market Expects the SEC to Approve First Bitcoin Spot ETF in 2024
Markets experts anticipate that the SEC will approve the first-ever spot Bitcoin ETF for the US market early next year. Optimism has grown among observers and participants in recent months after the financial regulator increased its engagement with aspiring ETF issuers and was instructed by a court to review one of its early rejection orders for a Bitcoin-focused ETF.
At the time of writing, Bitcoin (BTC) is trading at $42,997 – up 4.6% in the last 24 hours.