The United States Securities and Exchange Commission (SEC) has extended the review period for the listing of 7RCC’s carbon-neutral spot Bitcoin exchange-traded fund (ETF). A notice issued on May 2 states that the commission will now make a final decision on NYSE Arca’s application by June 24, instead of the original deadline of May 10. The purpose of the fund is to provide investors with exposure to Bitcoin (BTC) while offsetting the digital asset’s carbon footprint through carbon credits.
According to the application submitted by 7RCC, the Bitcoin ETF would track the daily fluctuations in the price of the cryptocurrency, as well as carbon credit futures based on the Vinter Bitcoin Carbon Credits Index. The custody of the Bitcoin fund would be handled by the crypto exchange Gemini. The goal of the ETF is to attract institutional investors who prioritize environmental, social, and governance (ESG) factors.
The ETF plans to allocate 80% of its assets to Bitcoin and the remaining 20% to financial instruments, such as swaps, which are tied to carbon credit futures contracts related to emissions allowances. 7RCC’s filing states that the carbon credits are linked to the European Union Emissions Trading System, the California Carbon Allowance, and the Regional Greenhouse Gas Initiative.
Carbon credit futures are financial derivatives that enable trading based on the expected future value of carbon credits. These instruments facilitate financial strategies to manage carbon regulatory risks and support investment strategies focused on the environment.
Since January, the SEC has approved 11 spot Bitcoin ETFs, allowing investors to directly invest in Bitcoin rather than through derivatives like futures. This provides regulated exposure to Bitcoin’s market movements through an investment product.
The next target for investment managers is options trading on spot Bitcoin ETFs. However, the SEC has been delaying a decision on applications submitted by the New York Stock Exchange, Nasdaq, and Cboe Global Markets since January.
In related news, 68% of Runes, a type of cryptocurrency, are currently in the red. This raises questions about their effectiveness as an upgrade for Bitcoin.