The U.S. Securities and Exchange Commission (SEC) has approved two landmark crypto index exchange traded funds by Franklin Templeton and Hashdex. Announced on December 19, the Franklin Crypto Index ETF will trade on the Cboe BZX Exchange, while Hashdex’s Nasdaq Crypto Index funds will be listed on the Nasdaq stock market.
Both ETFs will hold spot Bitcoin and Ether as part of their investment portfolios. The Franklin Crypto Index ETF tracks the Institutional Digital Asset Index, a benchmark representing key digital assets like Bitcoin and Ether. Hashdex’s ETF, on the other hand, follows the Nasdaq Crypto US Settlement Price Index.
The SEC’s approval comes on the heels of updated filings from both firms, with Franklin Templeton’s application receiving the green light on an “accelerated basis” as per its December 18 amendment. The regulatory body cited similarities in structure and operational terms with other previously approved Bitcoin and Ether exchange-traded products (ETPs) as a factor in its decision.
A New Era for Crypto Diversification
The approval has sparked speculation about the broader implications for the cryptocurrency ETF market. Nate Geraci, president of The ETF Store, stated the potential for these new products to inspire similar offerings from other major players.
“Will be interesting to see if BlackRock or others attempt to piggyback on this & launch similar ETFs,” Geraci noted in a December 19 X post. “Advisers love diversification, especially in an emerging asset class like crypto.”
Franklin Templeton first applied for its crypto index ETF in August, though the SEC delayed its decision until November 20. Hashdex, meanwhile, submitted its second amended application on November 25 following an initial filing in October that prompted additional scrutiny from the SEC.
Growing Interest in Crypto Index ETF
This year has seen a surge of interest in crypto index ETFs. In late November, NYSE Arca filed to list a Bitwise ETF holding both Bitcoin and Ether. The exchange had previously shown interest in listing a Grayscale crypto index ETF, which would include a diverse basket of spot cryptocurrencies.
The SEC’s latest approvals underscore growing institutional interest in crypto-based investment products and could pave the way for additional innovations in the ETF space. With regulatory hurdles clearing, the path forward seems promising for further integration of digital assets into traditional financial markets.
