Franklin Templeton seeks SEC’s nod for BTC, ETH Crypto Index ETF

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    Franklin Templeton joins Hashdex in the crypto index fund race 
    The index fund will track ETH and BTC

As a seasoned crypto investor with over a decade of experience navigating the digital asset landscape, I can’t help but feel a sense of anticipation and excitement about Franklin Templeton joining the crypto index fund race. Having closely followed the development of the industry and witnessed its rapid growth, I firmly believe that this move by such a respected institution validates the potential of cryptocurrencies to become an integral part of traditional finance.

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The $1.5 trillion asset manger Franklin Templeton is the latest player seeking to launch a crypto index ETF (exchange-traded fund). The firm filed a registration statement, S-1 form, with the U.S SEC (Securities and Exchange Commission) for an index ETF that would track Bitcoin [BTC] and Ethereum [ETH]. 

Part of the filing read, 

“This Fund aims to mirror the value of the digital assets within the CF Institutional Digital Asset Index – US Settlement Price, whose sole components are bitcoin and ether.”

Crypto index ETF race

Analysts are frequently discussing the possibility that a cryptocurrency index Exchange Traded Fund (ETF) could be the next development, following the approval of individual ETFs for top coins like Bitcoin and Ethereum. Recently, Brian Armstrong, the founder of Coinbase, shared this view during their latest earnings call.

“It seems to me that these concepts might prove incredibly advantageous… Our aim is to eventually establish a route where we can gradually introduce index funds, specifically designed for the cryptocurrency market.”

He also teased a Coinbase 500 that offers exposure to top crypto assets, similar to the S&P 500 Index, which tracks top U.S firms.

That being said, Armstrong acknowledged that regulatory challenges could delay such a vision, given that BTC and ETH are the only assets with regulatory clarity at the moment. 

As a crypto investor, I understand that Franklin Templeton’s crypto index fund (EZPZ) can only add additional assets such as Solana [SOL], subject to receiving the necessary regulatory approval.

“Would require regulatory approval to hold any additional digital assets…”

So far, Hashdex is the first to show interest in a U.S crypto index fund. The SEC’s decision on Hashdex’s application deadline is September 2024. 

Franklin Templeton’s decision indicates a potential increase in the crypto market, particularly for individuals interested in shared exposure to Bitcoin (BTC) and Ethereum (ETH).

The approval process requires the Securities and Exchange Commission (SEC) to endorse both the registration statements (S-1) and any proposed rule changes by the exchanges (19b 4b). If successful, these index funds would mark a historic milestone as the first publicly-traded crypto index funds in the United States.

However, it is worth noting that Bitwise already has a crypto index fund, Bitwise 10 Crypto Index Fund (BITW), tracking the top 10 assets. Right now, the fund is only available privately to approved clients and not on major exchanges like NYSE or Nasdaq though. 

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2024-08-17 15:03