The listing of 7RCC’s carbon-neutral spot Bitcoin exchange-traded fund (ETF) is facing a prolonged review period by the United States Securities and Exchange Commission (SEC).
In a notice issued on May 2, the SEC announced that it will now make a final decision on the NYSE Arca’s application by June 24. The original deadline was initially set for May 10.
The purpose of this fund is to provide investors with exposure to Bitcoin (BTC) while also mitigating the digital asset’s carbon footprint through the inclusion of carbon credits.
According to 7RCC’s application, the Bitcoin ETF would track the daily fluctuations in the price of the cryptocurrency and also include carbon credit futures based on the Vinter Bitcoin Carbon Credits Index. The custodian of the Bitcoin fund would be the crypto exchange Gemini.
“When we submitted the application, our goal was to attract institutional investors who prioritize environmental, social, and corporate governance (ESG) factors,” said Rali Perduhova, the co-founder and CEO of 7RCC Global.
The ETF intends to allocate 80% of its assets to Bitcoin and the remaining 20% to financial instruments, such as swaps, linked to carbon credit futures contracts related to emissions allowances. According to 7RCC’s filing, the carbon credits are associated with 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 anticipated future value of carbon credits. These instruments support financial strategies to manage carbon regulatory risks and promote environmentally-focused investment strategies.
Since January, the SEC has already approved 11 spot Bitcoin ETFs, which allow for direct investment in Bitcoin without the use of derivatives like futures. This provides investors with exposure to Bitcoin’s market movements through a regulated investment product.
The next objective for investment managers is to introduce 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.
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