Anika Begay
Trillion-dollar asset manager Franklin Templeton is looking to expand its presence in the crypto ETF market, having filed an application with the U.S. Securities and Exchange Commission (SEC) to issue a dual crypto ETF. The filing is second only to that of South American firm Hashdex, as both investment firms seek to expand a highly engaging crypto spot ETF market.
Franklin Templeton Launches Early Cap for Crypto Index ETF
On August 16, Franklin Templeton filed an application to issue the “FRANKLIN CRYPTO INDEX ETF,” an investment fund designed to hold both Bitcoin and Ethereum. This proposed dual-spot ETF is to be listed and traded on the Chicago Board Options Exchange (CBOE) with American cryptocurrency exchange Coinbase serving as the designated custodian of all assets invested in the trust.
With the FRANKLIN CRYPTO INDEX ETF, Franklin Templeton is looking to expand its reach into the U.S. cryptocurrency spot ETF market, following previous launches of exchange-traded products based on Bitcoin and Ethereum. While both hedge funds have attracted some interest and found stability with combined inflows of $445 million, their market performances pale in comparison to their counterparts backed by other asset managers such as BlackRock and Fidelity.
Therefore, an early nod to the crypto index ETF market could help the American investment firm improve its current market position in this regard. However, as previously stated, Franklin Templeton’s application to launch a dual crypto ETF lags behind that of Brazilian asset manager Hashdex. The SEC has already postponed its approval decision on Hashdex’s application, citing the need for more time to understand the intricacies of the dual crypto ETF.
Franklin Templeton is also expected to reveal more information about its newly proposed ETF in the coming weeks, as the SEC mulls an initial response that must be made within 45 days. That information includes the payout percentage for both Bitcoin and Ethereum, as well as the fund’s sponsorship fee. Franklin Templeton is known for offering investors relatively low fees, as evidenced by its paltry 0.19% sponsorship fee associated with its current spot cryptocurrency ETFs.
Cryptocurrency ETFs Pave the Way for Institutional Growth
The SEC’s historic approval of Bitcoin Spot ETFs in January marked a significant shift in traditional financial sector interest in cryptocurrency. This interest is evident in the current valuation of the Bitcoin ETF market at $17 billion, along with the recent launch of an Ethereum Spot ETF.
Alongside the new dual crypto ETF initiative, discussions about the potential introduction of Solana and XRP ETFs are gaining traction, with some analysts predicting a possible launch as early as 2025. Spot ETFs in particular have considerable potential to drive demand and growth for cryptocurrencies in the coming years as adoption by traditional financial institutions increases.
Featured image from Shutterstock, chart from Tradingview
