Franklin Templeton Joins Hashdex, Files For Crypto Index ETF

Trillion-dollar asset manager Franklin Templeton aims to widen its footprint in the crypto ETF market having filed with the US Securities and Exchange Commission (SEC) to issue a dual crypto ETF. This application falls second to that of South American company Hashdex as both investment firms attempt to expand a highly engaging crypto spot ETF market.

Franklin Templeton Throws Early Hat For Crypto Index ETF

On August 16, Franklin Templeton submitted 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 the American crypto exchange Coinbase serving as the designated custodian of all assets vested in the trust. 

With the FRANKLIN CRYPTO INDEX ETF, Franklin Templeton seeks to expand its reach in the US crypto spot ETF market following previous launches of Bitcoin and Ethereum-based exchange products. While both investment funds have attracted some interest and found stability with a combined inflow of $445 million, their market performance pales in comparison to their counterparts sponsored by other asset managers such as BlackRock and Fidelity. 

Therefore, an early nod into the Crypto Index ETF market could aid the American investment firm improve its current market standings in that regard. However, as earlier stated, Franklin Templeton’s request to launch a dual crypto ETF falls behind that of Brazilian asset manager Hashdex. Already, the SEC has postponed its approval decision on Hashdex’s application citing a need for more time to understand the intricacies of the dual crypto ETF.

Over the next few weeks, Franklin Templeton is also expected to reveal more information on its newly proposed ETF as the SEC mulls over an initial response that must be compulsorily given within 45 days. This information includes the distribution percentage of both Bitcoin and Ethereum as well as the fund’s sponsor fee. Franklin Templeton is known to offer investors relatively low fees evident with its measly sponsor fee of 0.19% attached to both its current crypto spot ETFs.

Crypto ETFs Pave The Way for Institutional Growth

The SEC’s historic approval of Bitcoin Spot ETFs in January has marked a significant shift in the traditional finance industry’s interest in cryptocurrency. This interest is evident in the current valuation of the Bitcoin ETF market at $17 billion, alongside the recent launch of an Ethereum Spot ETF.

Alongside the new venture of a dual crypto ETF, discussions around the potential introduction of Solana and XRP ETFs are gaining momentum, with some analysts predicting a possible launch as early as 2025. Notably, spot ETFs hold considerable potential for driving crypto demand and growth in the coming years in regards to boosting adoption by traditional financial institutions.

Featured image from Shutterstock, chart from Tradingview