Multinational asset manager Franklin Templeton has submitted an amended S-1 filing for its Franklin Crypto Index ETF, seeking approval to add tokens to the fund over time.
Submitted on Thursday, the filing states that the exchange-traded fund will initially track Bitcoin and Ethereum, with a weighting of 86.31% to BTC and 13.69% to ETH.
It doesn’t commit to adding any other cryptocurrencies, clarifying that “it is uncertain whether any digital assets other than Bitcoin and Ethereum may in the future be added to the Underlying Index.”
Yet it also doesn’t rule out additions, with the filing taking an almost open-ended approach that suggests more tokens could be added as and when the SEC permits.
As the S-1 form details, “In accordance with the Index Rules, the Underlying Index only includes digital assets that are determined by the Index Provider as being in conformance with prevailing capital markets regulations of major financial jurisdictions including the United States.”
More specifically, Franklin Templeton writes in the application that they would require that “the SEC has approved or permitted an exchange-traded product/fund” for a given token before the firm added it to the Franklin Crypto Index ETF.
The company already offers a Bitcoin ETF, which was one of the first batch of ETFs to gain SEC approval in January 2024.
It currently has a value of $743.7 million, while its sister Ethereum ETF is worth $33.9 million.
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If approved, the Franklin Crypto Index ETF will also list on the Cboe BZX Exchange, and for some commentators it could be a big breakthrough.
“The approval of a multi-asset crypto ETF could lay out the next phase for institutional and everyday investors seeking exposure to digital assets, without being correlated to one specific asset,” says Coinpass CEO and co-founder Jeff Hancock, speaking with Decrypt.
Hancock describes the launch of multi-currency ETFs as an “inevitability,” and suggests that the approval of such ETFs would bring “much-needed liquidity” to the market, as well as provide institutions with “unlimited options” in terms of asset allocation.
In fact, Franklin Templeton had gained approval for the original version of the fund, when it was envisioned as investing exclusively in Bitcoin and Ethereum.
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On Thursday, the U.S. Securities and Exchange Commission expedited approval for the Bitwise Bitcoin and Ethereum ETF, allowing it to be listed and traded on NYSE Arca. Bitwise’s hybrid ETF will offer investors direct exposure to Bitcoin (BTC) and Ethereum (ETH) in a single fund with Coinbase’s custody business to oversee the fund’s holdings. “I really want to interpret this as a sign the new SEC will be faster, but no way to know really,” Bloomberg senior ETF analyst Eric Balchunas wrote on X,...
In a release dated December 19, 2024, the SEC granted accelerated approval of Franklin’s application, which would have fast tracked the ETF for listing.
The regulator did the same thing at the end of January for the Bitwise Bitcoin and Ethereum ETF, which is currently still undergoing the S-1 review process.
The same thing—minus the fast tracking—applies to Hashdex’s Nasdaq Crypto Index US ETF, which will also invest in BTC and ETH.
Such filings come amid applications for ETFs for cryptocurrencies other than Bitcoin and Ethereum, with Bitwise and Grayscale both filing in January for Dogecoin ETFs, and with four firms filing for XRP ETFs in the past 24 hours alone.
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Investment firms have stepped up their crypto ETF applications following the November election of Donald Trump, whose pick of the pro-crypto Paul Atkins as chair of the SEC has invited the belief that the SEC is more willing to approve such applications.
This is the view of cryptocurrency analyst and author Glen Goodman, who believes not only that the Franklin Crypto Index ETF will be approved by the SEC, but also that the appointment of Atkins means it will “be much easier” to gain approval for crypto-focused investment vehicles.
He tells Decrypt, “Paul Atkins [...] is about as pro-crypto as the industry could hope for. When he takes over, the shift from Gensler's SEC to Atkins' SEC will be like night and day.”
Edited by Stacy Elliott.
