Franklin Templeton Enters Competition for Approval of Dual Crypto ETFs

• Franklin Templeton makes a significant move to broaden its cryptocurrency offerings by submitting a request for a dual Bitcoin and Ethereum ETF, with the goal of enhancing its market presence.

Franklin Templeton, a prominent global asset management firm, is undertaking substantial measures to bolster its standing in the cryptocurrency exchange-traded fund (ETF) sector.

On August 16, the firm submitted a filing to the U.S. Securities and Exchange Commission (SEC) to initiate a new “FRANKLIN CRYPTO INDEX ETF.”

This fund will allocate investments in both Bitcoin and Ethereum, the two largest digital currencies, and will be listed on the Chicago Board Options Exchange (CBOE). Coinbase, a leading U.S. cryptocurrency exchange, will serve as the custodian for the ETF’s assets.

This initiative is part of Franklin Templeton’s strategy to enhance its footprint in the U.S. crypto ETF market, where it has previously introduced individual Bitcoin and Ethereum ETFs.

These funds have garnered $445 million in total inflows, indicating consistent interest from investors. However, their performance has not matched that of comparable offerings from other asset management firms such as BlackRock and Fidelity.

The timing of this filing is significant, as it follows a similar request from Brazilian asset manager Hashdex. Hashdex also seeks to introduce a dual crypto ETF, but the SEC has postponed its decision on their application, citing the necessity for additional time to assess the complexities involved.

Early approval could provide Franklin Templeton with a competitive advantage in this developing market. In the upcoming weeks, the firm is anticipated to share more information regarding the ETF, including the precise allocations of Bitcoin and Ethereum and the related sponsor fee.

Franklin Templeton is known for its low fee structure, as evidenced by its existing crypto ETFs, which feature a sponsor fee of merely 0.19%.

The growing interest in crypto ETFs among traditional financial institutions signifies a notable transformation in the industry’s perception of digital assets.

The SEC’s prior approval of Bitcoin Spot ETFs has already invigorated the market, which is currently valued at approximately $17 billion. The recent launch of an Ethereum Spot ETF has further intensified interest in these financial products.

As Franklin Templeton and Hashdex vie for SEC approval, the broader market is closely monitoring developments.

The success of these dual crypto ETFs could pave the way for additional cryptocurrency ETFs, with analysts forecasting that Solana and XRP ETFs may emerge by 2025. Spot ETFs, which directly track the price of their underlying assets, are regarded as essential for promoting crypto adoption within traditional finance.

For institutional investors, spot ETFs provide a regulated and convenient method to invest in cryptocurrencies without the complications of purchasing and securing digital assets directly.

As more institutions adopt crypto through these ETFs, demand is projected to increase, further integrating digital assets into the global financial framework.

The SEC’s decisions regarding Franklin Templeton and Hashdex’s applications will be pivotal in influencing the future of institutional crypto adoption.

Approval of these dual crypto ETFs could broaden investment opportunities for institutions and highlight the increasing acceptance of cryptocurrencies as a legitimate asset class within traditional finance.

Franklin Templeton’s proactive stance in filing for this dual crypto ETF illustrates its dedication to remaining at the forefront of a swiftly changing financial environment.

While the SEC’s response is still awaited, Franklin Templeton is positioning itself to become a significant participant in the competitive crypto ETF landscape.