Franklin Templeton has applied to the U.S. Securities and Exchange Commission (SEC) to launch a new cryptocurrency ETF. The proposed Franklin Crypto Index ETF will attempt to mirror the performance of the CF Institutional Digital Asset Index, which currently consists of Bitcoin and Ethereum. Upon approval, the ETF will be a welcome addition to the expanding market of crypto index funds.
Franklin Templeton Files New Crypto ETF
The Franklin Crypto Index ETF is a diversified fund emphasising Bitcoin and Ethereum. This ETF will hold these digital assets based on their CF Institutional Digital Asset Index allocations. Subject to further regulation, the company may expand its offerings to include other cryptocurrencies at a later date.
This comes in the wake of rising interest in crypto index ETFs following the launch of Bitcoin and Ether ETFs. This initiative will make the firm one of the first to enter the crypto index ETF market and face other similar products, such as the Hashdex Nasdaq Crypto Index ETF. The Hashdex ETF was the first to apply for regulatory approval, and others followed its lead.
Advertisement
Analysts predict that index-based ETFs will be the next big thing in the investment market. These products allow for easy investment in several cryptocurrencies. Katalin Tischhauser, the head of investment research at Sygnum, pointed out that indices are convenient for investors, just like the S&P 500 index works for traditional markets.
Nonetheless, crypto index ETFs are only available for Bitcoin and Ethereum. The SEC has only approved these two digital assets for use in ETFs. This restriction may be different in the future, but these assets will be the dominant constituents of the index ETFs for now.
New Crypto ETF Seeks Nasdaq Listing
Franklin Templeton’s ETF cannot be traded on public exchanges until it gets the approval of the Securities and Exchange Commission. The company has submitted an S-1 registration statement, an essential aspect of the process. Furthermore, an ETF cannot be created without at least one public equities exchange, such as Nasdaq, which is willing to list it.
The launch of Franklin Templeton’s crypto ETF is evidence of increasing competition in this nascent market. Grayscale, the largest crypto asset management company, is also interested in launching crypto index ETFs. As the market grows, more complex and index-based products are expected to enter the market to allow investors to participate in the crypto space.
Advertisement
Also Read: Wisconsin Board Boosts Stake in BlackRock Bitcoin ETF
