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Purpose Carbon Neutral Crypto ETFs

Carbon Offset FAQs

Does this affect my existing Bitcoin (or Ether) shares?

It does not. This is a new and separate series dedicated for investors who want Bitcoin or Ether exposure without the associated carbon emissions.

Who pays for carbon offsetting?

The carbon offsetting fees are added to the existing fees associated with managing the Bitcoin and Ether ETFs for the carbon-neutral series.

How much do these offsets cost?

We estimate offsetting fees to be roughly 0.10% - 0.20% for the Bitcoin carbon-neutral series and 0.07% - 0.10% for the Ether. These fees are included as part of the total fees depicted in the management expense ratio.

How does carbon offsetting work?
  • Carbon offsetting is a process that allows individuals and companies to invest in environmental projects around the world to cancel out or neutralize their carbon footprint.
  • A carbon offset is a certified transferrable instrument that represents an emissions reduction of one metric tonne of CO2, or an equivalent amount of other greenhouse gases.
Are these cryptocurrency series carbon neutral or net zero?

These series are carbon neutral. They have zero carbon footprint, which they achieve by investing in traditional carbon offsets as well as negative emission offsets. The negative emission offsets remove and sequester CO2 from the atmosphere using either biological or technological methods. Negative emissions are far more effective at neutralizing a company’s emissions because the net outcome of the offset is zero.

What types of projects do you purchase carbon credits from?

The carbon credits are purchased from traditional carbon offset projects as well as carbon removal and sequestration projects involved with biochar, mineralization, bio-oil, enhanced weathering, improved forest management and reforestation, oceans, renewable energy, energy efficiency, gas capture, soil, and clean water. A curated list of these projects can be found here.

There are a lot of discussions around greenwashing. How is this not greenwashing?
  • Greenwashing is a complex topic that you can learn more about here. We always strive to be upfront and transparent about our goals for this, and ESG initiatives more broadly, and want to impress that we’re not claiming to solve cryptocurrency’s sustainability problem with our carbon neutral series. However, consistent incremental improvements are important in our fight against climate change. We believe offering investors a carbon neutral way to invest in crypto is the first step.
  • We take significant precautions to ensure the climate projects we invest in have the highest quality by today’s standards. However, we acknowledge that this area is relatively new, so our approach may have potential weaknesses. We continue to monitor and adapt to evolving standards to ensure we invest only in projects that meet the highest requirements available.
You use carbon credits in the voluntary carbon market. What is the difference between this and cap-and-trade programs?
  • Cap-and-trade programs are used to control the distribution and management of carbon credits. In cap-and-trade systems, countries and corporations are allotted a certain level of acceptable emissions—the “cap” in “cap-and-trade.” Companies that are unable to reduce their carbon production must buy carbon credits from the market—this is the “trade” in “cap-and-trade.”
  • However, offsets represent the removal of CO2 from the atmosphere and not the right to emit carbon. In essence, while cap-and-trade programs transfer the right to emit, the credits we buy represent the removal of CO2 from the atmosphere.
How do you measure the carbon footprint of the Bitcoin you buy?
  • Through our partnership with Patch, when you invest in one of our carbon neutral series, all carbon emissions linked to your investment will be automatically targeted to achieve net zero carbon output using Patch’s API-based solution, which takes into account various inputs, such as the efficiency of mining equipment, distribution of hash power, and nation level carbon emission data, to estimate the amount of carbon emissions our portfolio have.
  • You can find a more detailed breakdown of our methodology here.
Your custodian also says they are purchasing carbon credits. How is this any different?
  • While we buy offsets that represent the removal of CO2 out of the atmosphere or prevention of additional emissions, Gemini buys and “vaults” (locks away) carbon credits that represent the right to emit carbon.
  • Therefore, while both methods intend to limit emissions, Gemini emits and then prevents access to “right to emit” whereas we emit and then invest in conventional and negative emissions projects for offsetting our footprint.
Do you actively “trade” the projects?

We do not. Offsets are expired once we buy and cancel out our portfolio’s emissions. This ensures these offsets cannot be used for anything else than to balance out the emissions of our portfolio.

What are the carbon verification standards?

The verified carbon standards (VCS) provide a credible but simple set of criteria that will provide integrity to the voluntary carbon market. These standards ensure that all project-based voluntary emission reductions are independently verified to meet its criteria, defined as Voluntary Carbon Units (VCUs), which represent real, quantifiable, additional, and permanent project-based emission reductions.

Are the carbon projects you invest in verified?
  • While we do our best in finding projects that meet the highest possible standards, some emerging carbon sequestration technologies don’t align with traditional verification methodologies. Although this can seem like an issue, we believe we need to make parallel attempts in supporting projects with legacy verification standards and give promising new technologies a chance at advancing in order to solve the carbon emissions problem at hand.
  • We acknowledge that carbon credit markets are relatively new, especially the voluntary markets, and we will continue updating our requirements match highest possible standards.
Who is Patch?

Patch is an API-first platform for carbon removal, backed by Andreessen Horowitz, Coatue Management, VersionOne, Pale Blue Dot, and others. Patch enables businesses to achieve their carbon neutrality goals and become more sustainable by offsetting unavoidable emissions created by their business operations. Developers also use the Patch API to build negative emissions into their products.