Franklin Templeton, a multi-trillion dollar asset management firm, is making a bold move into the cryptocurrency space. The company has filed for a new exchange-traded fund (ETF) that would give investors exposure to both Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization.
This move is a significant development for the crypto industry, as it comes from a traditional financial giant like Franklin Templeton. The firm’s application with the U.S. Securities and Exchange Commission (SEC) on Wednesday signals its intention to offer investors a single product that tracks the performance of Bitcoin and Ethereum, streamlining their exposure to these digital assets.
The proposed ETF, dubbed the Franklin Templeton Bitcoin and Ethereum Crypto Index ETF, is designed to be an index fund, meaning it will track the performance of a collection of assets – in this case, Bitcoin and Ethereum. This allows investors to participate in the crypto market without directly owning the underlying cryptocurrencies themselves.
If approved by the SEC, the ETF will be traded on the Chicago Board Options Exchange (CBOE). Bank of New York Mellon (BNY Mellon), a major custodian in the United States, will handle the fund’s cash and cash equivalents. Coinbase, a leading cryptocurrency exchange, will act as the custodian for the Bitcoin and Ethereum tokens held within the fund.
One notable aspect of this offering is that the ETF will be sold in large increments, specifically in blocks of 50,000 shares. The product’s Net Asset Value (NAV) will be used to determine the share price. Additionally, the index fund will be benchmarked against the CF Institutional Digital Asset Index, which tracks the market performance of both Bitcoin and Ethereum, ensuring its performance closely aligns with the underlying cryptocurrencies.
This ETF filing represents a significant expansion of Franklin Templeton’s involvement in the crypto space. The firm already provides clients with exposure to spot Bitcoin and Ethereum ETFs, demonstrating its ongoing interest in broadening its crypto-based offerings.
Interestingly, this ETF filing comes just hours after Franklin Templeton announced a collaboration with the Aptos Foundation to launch its on-chain U.S. Government Money Market Funds (FOBXX). This product allows investors to access FOBXX through the purchase of the BENJI BENJI/USD token, highlighting Franklin Templeton’s commitment to integrating blockchain technology into traditional finance products.
BNY Mellon is poised to play a significant role in the potential success of this ETF. The institution has received regulatory clearance from the SEC to hold digital assets, with an initial focus on Bitcoin and Ethereum ETFs. While this exemption came with specific conditions, SEC Chairman Gary Gensler has indicated that BNY Mellon could expand its digital asset custody services if it adheres to specific guidelines.
The emergence of major institutions like Franklin Templeton and BNY Mellon in the cryptocurrency market underscores the growing acceptance and integration of digital assets within the traditional financial system. This move signals that cryptocurrencies are increasingly seen as legitimate investment vehicles, and the development of innovative financial products like this ETF could significantly accelerate the mainstream adoption of digital assets.
