Franklin Templeton Investments, a trillion-dollar asset manager, has filed a proposal to the U.S. Securities and Exchange Commission (SEC) to launch a Bitcoin and Ethereum index exchange-traded fund (ETF). The fund, dubbed Franklin Templeton Bitcoin & Ethereum Crypto Index ETF, aims to give investors an exposure to both Bitcoin and Ethereum, the two largest cryptocurrencies.
Franklin Templeton Files for Bitcoin & Ethereum Index ETF
In a recent filing, Franklin Templeton has proposed launching a new ETF that will allow investors to gain exposure to Bitcoin and Ethereum within a single fund. The assets of the ETF will be Bitcoin, Ethereum, cash and cash equivalents, which are short-term securities with a maturity of less than three months.
This fund will open the door for investors to get involved in both cryptocurrencies without having to own the underlying assets.
BNY Mellon, a firm that offers financial services across the globe, will both hold and distribute the fund, and Coinbase Custody will oversee the digital assets of the ETF. The proposed ETF will be benchmarked to the CF Institutional Digital Asset Index, which tracks the performance of Bitcoin and Ethereum based on prevailing market conditions.
Combining Bitcoin and Ethereum in One Fund
This proposed ETF would be the first of its kind to be invested in both Bitcoin and Ethereum in one index fund. It is intended to let investors have a simpler way of investing in two biggest digital currencies by market capitalization. The asset manager aims to make it easier for institutional and retail investors to gain access to the top cryptocurrencies without having to navigate the volatility and intricacies of cryptocurrency exchanges by offering both assets within one product.
Franklin Templeton Bitcoin & Ethereum Crypto Index ETF will be available in the form of 50,000 share blocks. The price per block will be equivalent to the net asset value (NAV) of the Bitcoin and Ethereum held in the fund. However, the ETF will not participate in staking or other forms of earning income with the digital assets.
Subsequently, the ETF filing is a part of the asset manager’s expansion into blockchain technology. Recently, the firm added the OnChain U.S. Government Money Market Fund to the Aptos blockchain. This decision enhances the flexibility of the fund since the use of tokens means that the fund can be bought and sold on the blockchain.
Regulatory Scrutiny from the US SEC
The launch of the ETF is subject to the approval of the US SEC and focuses on protecting investors against fraud and market manipulation of the underpinning assets. The proposal specifically mentions the oversight agreements with regulated futures markets like CME Bitcoin and Ether Futures within its framework.
Crypto ETFs have had a tough time in the US due to strict laws with the Securities and Exchange Commission being quite skeptical of these products. Furthermore, this move comes at a time when a number of applications for crypto-related ETFs have been filed, including that of Bitwise for an XRP ETF.
The regulator has frequently insisted on having robust measures against fraud and Franklin Templeton’s plan intends to achieve this through using regulated futures markets and a robust system of custody.
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
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