Just In: Franklin Templeton Files For Bitcoin & Ethereum Index ETF With US SEC

Franklin Templeton submitted a draft to the US SEC to introduce a Bitcoin & Ethereum index of ETFs with BNY Mellon and Coinbase. Franklin Templeton Investments an investment management company with over one trillion in assets under management wants to bring an ETF that tracks Bitcoin and Ethereum to the public through the SEC. The fund to be known as Franklin Templeton Bitcoin & Ethereum Crypto Index ETF seeks to offer investors exposure to both Bitcoin and Ethereum.

Franklin Templeton Files for Bitcoin & Ethereum Index ETF

Franklin Templeton has submitted a new filing to introduce a new ETF that will initially offer exposure in both Bitcoin and Ethereum. The total portfolio of ETFs will consist of Bitcoins, Ethereum, Cash and cash equivalents, which means all short-term financial instruments with a maturity of up to 90 days. 

This fund will create an opportunity for investors to become invested in both without having to own the actual tokens of the asset.

BNY Mellon will act as a Trustee of the fund and distribute the fund, while Coinbase Custody will manage all the digital assets of the ETF. This proposed ETF will rely on the CF Institutional Digital Asset Index, which specifically derives its values from the market prices of Bitcoin and Ethereum according to current market situations.

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Combining Bitcoin and Ethereum in One Fund

This ETF would be the first to invest in both Bitcoin and Ethereum in one index product. It is designed to help investors avoid the difficulties of directly investing in the two biggest digital currencies by market cap. To be more precise, the asset manager wants to help institutional and retail investors get exposure to the top coins without having to deal with the turbulence of the exchanges or the specifics of each crypto coin, by providing both inside one product.

Franklin Templeton Bitcoin & Ethereum Crypto Index ETF which will be tradable under the ticker FEET will come as 50 000 share blocks. The price per block will thus be equal to the net asset value (NAV) of Bitcoin and Ethereum within the fund. However, the ETF will not invest or engage in staking or any other methods of earning income with such digital assets.

After that, the ETF filing forms part of the asset manager’s diversification into blockchain technology. In the last year, the firm integrated the OnChain U.S. Government Money Market Fund into the Aptos blockchain. This decision has made the fund flexible in that the use of tokens is that the fund can be commensurate with the blockchain.

Specific Overview of the US SEC Regulation

The ETF is still pending US SEC approval and seeks to guard investors against deceit and manipulation of the underlying assets. The proposal does pinpoint the oversight agreements with the regulated futures markets such as CME Bitcoin and Ether Futures within its structure.

Crypto ETFs have struggled in the US because of the laws since the SEC has been quite reluctant to approve these products. Moreover, this decision is rather timely since several companies applied for the approval of crypto-based ETFs; Bitwise applied for an XRP ETF included. 

The regulator has often demanded sound controls against fraud and Franklin Templeton’s plan seeks to address this by employing unrestricted futures markets and a proper custody system