Franklin Templeton Seeks SEC Approval for New Crypto Index ETF

• Franklin Templeton’s Crypto Index ETF aims to offer diversified exposure to multiple cryptocurrencies, starting with Bitcoin and Ethereum.
•  The ETF will use a weighted structure based on market capitalization, with pricing data from the CME CF reference rates.
• Institutional interest in crypto ETFs is growing, with a notable increase in professional firms investing in spot ETFs.

Franklin Templeton, a leading US asset management firm, has applied to the Securities and Exchange Commission (SEC) to launch a new Crypto Index Exchange-Traded Fund (ETF). This move marks a significant step towards expanding its presence in the digital asset market. 

Expanding Crypto Offerings

The proposed “Franklin Crypto Index ETF” will offer investors exposure to multiple cryptocurrencies, starting with Bitcoin and Ethereum. As the market evolves, the index may expand to include additional digital assets, reflecting the firm’s commitment to adapting to market demands.

Structured for Diversification

The ETF will be structured as a weighted offering, with allocations based on the market capitalization of the underlying assets. Pricing data will be derived from the CME CF Bitcoin and Ethereum reference rates, ensuring accurate and transparent valuations.

This application underscores the growing interest from institutional investors in the crypto sector. Data from K33 Research reveals that the number of professional firms investing in crypto-related spot ETFs increased significantly in the second quarter of this year.

Should the SEC give this ETF its approval, Franklin Templeton may become a top competitor in the market and attract investors who would otherwise put their money into single-asset ETFs. “EZPZ” is the symbol under which it would be listed on the Cboe BZX Exchange; custody of digital assets would be handled by Coinbase Custody Trust Company while cash holdings as well as administrative duties are taken care of by Bank of New York Mellon.

Increasing Competition for Crypto ETFs

The move by Franklin Templeton reflects what has been described as an “arms race” among investment managers seeking to offer products related to cryptocurrencies. Hashdex, Grayscale Investments and VanEck have all filed applications with U.S.-based regulators for permission to launch Bitcoin exchange-traded funds (ETFs) this year, while Fidelity Investments recently launched Wise Origin Bitcoin Trust for accredited investors only.