7RCC, an asset manager, submitted an application to the SEC on Monday for a unique Bitcoin ETF, aiming to blend exposure to the cryptocurrency with carbon credits. This innovative approach addresses concerns about Bitcoin’s environmental impact and targets investors focused on ESG considerations.

Rali Perduhova, CEO of 7RCC Global, highlighted the initiative’s goal to attract institutional investors seeking ESG compliance amid concerns regarding Bitcoin’s energy-intensive mining process and associated carbon footprint.

ESG, emphasizing environmental, social, and governance factors, has gained traction among investors aiming for socially responsible portfolios. Despite opposition, particularly from some Republican lawmakers, this approach has attracted asset managers. A survey revealed that a significant percentage of institutional investors in the U.S. plan to increase their ESG allocations significantly in the coming years.

While traditional ETFs offer diversified exposure to various assets, Bitcoin ETFs face scrutiny due to the cryptocurrency’s carbon footprint. 7RCC’s proposed BTCK ETF aims to balance this by blending 80% spot Bitcoin with 20% carbon credit futures, fostering a carbon-neutral investment strategy.

The S-1 filing on Monday introduced this new ETF concept but did not address the debate over redemption mechanisms. Meetings between entities like BlackRock and the SEC focus on these mechanisms. 7RCC has engaged Gemini as custodian and is partnering with the financial platform Tidal to launch the white-labeled ETF.

The 7RCC Spot Bitcoin and Carbon Credit Futures ETF marks the firm’s inaugural offering. Matthew Homer, a former executive deputy superintendent at the New York Department of Financial Services, is a key advisor to the project, reflecting the significant emphasis on ESG in current financial conversations. CEO Perduhova aims to capture a substantial portion of funds interested in ESG investment strategies.