Key Points
- Franklin Templeton Investments has proposed a Bitcoin and Ethereum index ETF to the SEC.
- Hashdex plans to introduce an ETF holding spot Bitcoin and Ethereum.
Franklin Templeton Investments, a leading asset manager, has proposed a Bitcoin [BTC] and Ethereum [ETH] index exchange-traded fund (ETF) to the U.S. Securities and Exchange Commission (SEC).
If the proposal gets the green light, it would allow the global investment firm to combine BTC and ETH into a single fund. This would offer investors an efficient way to gain exposure to both digital assets.
The Proposed ETF
The proposed ETF would include Bitcoin, Ethereum, and cash equivalents, such as short-term securities maturing in less than three months. This would allow investors to engage with these cryptocurrencies without directly owning them.
Interestingly, this proposal comes at a time when BTC ETFs recorded outflows worth $52.9 million, while ETH ETFs saw inflows of $19.8 million, according to Farside Investors.
Impact on the Crypto Market
Franklin Templeton’s proposed Bitcoin and Ethereum Crypto Index ETF would be the first fund to combine both BTC and ETH in a single index product.
The ETF is designed to streamline the investment process for both institutional and retail investors, providing them with simplified access to the two largest cryptocurrencies by market capitalization.
This move would also reduce the complexities and volatility often associated with cryptocurrency exchanges.
The fund will be available in blocks of 50,000 shares, priced based on the net asset value (NAV) of the underlying Bitcoin and Ethereum.
The ETF will not engage in staking or other income-generating activities with its digital assets, maintaining a straightforward approach to crypto investment.
CSC Delaware Trust Company, a subsidiary of the Corporation Service Company, will serve as the trustee. Bank of New York Mellon will be the custodian for the Fund’s cash and cash equivalents and also serve as the Fund’s administrator and transfer agent.
Coinbase Custody Trust Company, LLC will be responsible for custody of the Fund’s bitcoin and ether. Each Share will represent a fractional undivided beneficial interest in the Fund’s net assets.
However, the approval of the fund depends on the SEC’s evaluation, particularly regarding anti-fraud measures. The SEC typically approves crypto ETFs only after confirming that robust safeguards are in place to prevent fraud and market manipulation in regulated futures markets.
Hashdex’s Crypto Index ETF Proposal
Franklin Templeton is not the only firm with such plans. In July, Hashdex, a leading crypto asset management firm, also made significant strides toward launching an ETF that will directly hold both spot BTC and ETH.
The firm also submitted its S-1 registration statement to the U.S. SEC, positioning the Hashdex Nasdaq Crypto Index US ETF to be a potential game-changer in the U.S. market.
