CoinShares takes on an advisory role with Viridi ahead of the ESG Focused Crypto Mining product launch
ST. HELIER, Jersey, May 27, 2021 — CoinShares (Nasdaq First North Growth Market: CS), Europe’s largest digital asset investment house with $3.7B in AUM, today announced a strategic investment in Viridi Funds (Viridi), an emerging fund manager. CoinShares also disclosed that it will take on an advisory role for Viridi, which will launch the first ESG (environmental, social, governance) crypto mining product in the US.
This investment marks CoinShares’ latest strategic ESG investment, and the firm’s role as an advisor to Viridi brings along its experienced management team to assist in bringing an innovative new product to the US market. Exchange traded products (ETPs) are core to the CoinShares business, and asset management revenues from ETPs made up 40% CoinShares’ Q1 revenues, generating $24M (£17M) in revenue for the three months ended March 31, 2021.
ESG products represent a growing category in global asset management. At the end of 2020, global ESG assets stood at $38 trillion, and are on track to exceed $53 trillion by 2025.(1) Though demand from European investors has historically dominated the market for ESG-focused investments, U.S. products may bring the next wave of organic expansion. As investor demand for ESG mandates grows, asset managers and investment firms of all types will continue to evolve their portfolios to bring these innovative new products to market.
In recent months, cryptocurrencies have been under significant media scrutiny regarding their energy usage, but the facts simply don’t match the narrative. CoinShares Research has found that over 70% of bitcoin mining is done with renewables. On the other hand, the Cambridge Center for Alternative Finance (CCAF) has estimated that the figure is closer to 39%, which means bitcoin’s share of renewables is nearly double that of the U.S. energy grid.(2) Through its investment arm, CoinShares Ventures, the firm has put forth an initiative to actively find and fund companies involved in creating a sustainable mining infrastructure, including recent investments in Compass Mining and MintGreen. This strategic investment in Viridi will further extend CoinShares’ market leadership in this area and allow the firm to meet emerging client appetite for these types of products.
Meltem Demirors, Chief Strategy Officer at CoinShares commented on today’s news, “At CoinShares we believe in a proactive approach to not only identifying dominant market trends, but also acting on those which bring a clear market incentive. This collaboration with Viridi Funds is in alignment with our goal to advance the concept of sustainability on a global scale as well as provide innovative, forward thinking investment vehicles that make digital assets accessible to individuals and institutions alike. I am excited to bring our years of experience in exchange traded products and capital markets to this new product family and look forward to working closely with Wes and the Viridi team to bring ESG products to the US market and beyond.”
With the help of Luxor Technologies, Viridi combines advanced knowledge of crypto mining economics and public markets with proprietary, hashrate valuation principles to power a fundamentals-based investment strategy. Viridi will be targeting investment into global crypto mining operations with leading ESG properties, hardware efficiency and operational expertise.
“Our team is thrilled to welcome CoinShares as both an investor and advisor,” commented Wes Fulford, CEO of Viridi Funds. “Here at Viridi, we are focused on delivering a positive, tangible impact to global crypto mining markets through an active investment strategy which will help push operators to become greener. This is an important and necessary step for the mass adoption of cryptocurrency.”
(1) Bloomberg Global Intelligence, ESG assets may hit $53 trillion by 2025, a third of global AUM
(2) Harvard Business Review, Nic Carter, How Much Energy Does Bitcoin Actually Consume
About the CoinShares Group
CoinShares is Europe’s largest digital asset investment house, managing billions of assets on behalf of a global client base. Our mission is to expand access to the digital asset ecosystem by pioneering new financial products and services that provide investors with trust and transparency when accessing this new asset class. CoinShares is publicly listed on the Nasdaq First North Growth Market under ticker CS.
For more information on CoinShares, visit: https://coinshares.com
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Investments involve risks. Principal loss is possible. ETFs may trade at a premium or discount to their net asset value. Redemptions are limited and often brokerage commissions are charged on each trade which may reduce returns.
The Fund will not invest directly in cryptocurrencies however it invests in companies involved in the cryptocurrency industry such as mining and manufacturers which can be very volatile. There is no assurance that the cryptocurrency network or service providers will continue in existence or grow. Technology companies may have limited product lines, financial resources and could face intense competition and rapid product obsolescence. Cryptocurrency functionality relies on the Internet and a significant disruption of connectivity could impede functionality and the risk of fraud or cyber-attack which could have adverse effect on the Fund’s investments.
Cryptocurrencies are subject to supply and demand so it is unclear how it will be impacted by geopolitical events. Nevertheless, political, health or economic crises may motivate large-scale acquisitions or sales of cryptocurrency either globally or locally. Large movements in the price of cryptocurrencies could create volatility and negatively impact the value of the Fund.
Cryptocurrencies exchanges are new and largely unregulated without any central authority or backing by any government or banks. Cryptocurrency is not legal tender and may experience very high volatility or be more exposed to fraud, glitches or stop operating.
Cryptocurrencies currently face an uncertain regulatory landscape and are rapidly evolving in not only the United States but also in many foreign jurisdictions. The adoption of laws and regulations that affect the industry could ultimately have a negative impact or impede the growth of the companies the fund invests in.
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The fund invests in micro-, small-, and mid-capitalization sized companies which could have less liquidity and lower-trading volumes which tend to make their market price fall more in response to selling pressures and may have limited markets, product lines, or financial resources and lack management experience.
The Fund’s crypto mining investments will be screened with clean energy criteria. Given the high energy usage of the crypto mining industry, the Sub-Adviser will evaluate crypto mining companies by focusing on their actions that will reduce the negative environmental impacts of mining. The Sub-Adviser will also consider purchased carbon offsets and other actions promoting environmental sustainability. There can be no assurance that this strategy will be successful for the Fund.
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The Funds are distributed by Quasar Distributors, LLC. The Sub-Adviser (Viridi Funds) provides clean energy screening.
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