- Franklin Templeton files for a Bitcoin and Ethereum ETF, expanding crypto investment options.
- The ETF will rebalance quarterly, with Bitcoin at 86.31% and Ethereum at 13.69% allocation.
- Future crypto additions depend on regulatory approval, limiting the fund to BTC and ETH for now.
Franklin Templeton has filed for a multi-asset crypto ETF with the US Securities and Exchange Commission. The Franklin Crypto Index ETF proposes combined exposure to Bitcoin alongside Ethereum through a single investment fund. Once approved, the ETF will begin trade operations on the Cboe BZX Exchange utilizing a market capitalization allocation methodology.
Quarterly Rebalancing of the Crypto ETF
The Franklin Crypto Index ETF engages in quarterly portfolio adjustments through its rebalancing and reconstitution protocols. The fund’s latest report indicates Bitcoin represents 86.31% of its assets and Ethereum accounts for 13.69%. Index rebalancing events take place quarterly during March, June, September and December.
Franklin Templeton expects to introduce additional cryptocurrencies as part of their future plan. The addition of new assets requires regulatory approval from both the Cboe BZX Exchange and the SEC before implementation. The firm has made no promises to incorporate assets beyond Bitcoin and Ethereum into its plans.
Market Risks and Competitor ETFs
The filing highlights risks associated with competition from other cryptocurrencies. The emergence of tokens like Solana, Avalanche, and Cardano could impact demand for the ETF. Franklin Templeton warns that investor interest in alternative assets may reduce liquidity in its fund.
Bitwise submitted an application for the Bitwise Bitcoin and Ethereum ETF which shares similarities to their earlier filing. The new proposal from Franklin Templeton joins the expanding number of cryptocurrency ETFs that seek approval from the US market. The SEC’s response to these proposed filings will decide the fate of future multi-asset crypto ETFs.
Influence of Regulatory Changes
Recent changes in the SEC leadership could influence the approval process for crypto ETFs. The resignation of former SEC Chair Gary Gensler on January 20 has shifted the regulatory landscape. Mark Uyeda, the acting SEC Chair, is considered more open to cryptocurrency investments.
Additionally, Cboe BZX Exchange recently submitted filings for XRP ETFs on behalf of four asset managers. Growing numbers of ETF proposals demonstrate expanded institutional interest in digital assets. The SEC’s approval of a new cryptocurrency ETF may indicate a fundamental change in its regulatory policies.
Future Outlook for Crypto ETFs
Franklin Templeton’s filing follows Trump’s inauguration and subsequent regulatory shifts. ETF approvals depend heavily on how the new administration views cryptocurrency regulation. Fund managers and investors continually assess these developments.
Potential investors remain in uncertainty regarding Franklin Templeton’s request for approval. The approval process represents a crucial milestone which allows traditional investment portfolios to include cryptocurrency investments. The SEC’s decisions regarding pending cryptocurrency filings will determine the direction of financial products that incorporate digital assets.
