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.”