Franklin Templeton Seeks SEC Approval For Dual Bitcoin, Ethereum Index ETF

Franklin Templeton, a multi-trillion dollar asset management firm, has filed for a new exchange-traded fund (ETF) that would provide exposure to both Bitcoin and Ethereum.

According to an application with the U.S. Securities and Exchange Commission (SEC) on Wednesday, the firm aims to offer investors a single product that tracks the performance of the two largest cryptocurrencies by market capitalization.

A New Index ETF On The Horizon

The Oct. 2 filing reveals Franklin Templeton’s intention to launch an index fund that encompasses both Bitcoin and Ethereum. An index fund typically tracks the performance of a collection of assets—such as stocks, bonds, or cryptocurrencies—enabling investors to gain exposure to these assets without directly owning them.

In this case, the proposed ETF would specifically target Bitcoin and Ethereum, allowing investors to benefit from the movement of these leading cryptocurrencies.

If approved, the new Franklin Templeton Bitcoin and Ethereum Crypto Index ETF will be traded on the Chicago Board Options Exchange CBOE.

Bank of New York Mellon BK, one of the largest custodians in the United States, is set to handle the fund’s cash and cash equivalents, while Coinbase COIN will act as the custodian for the Bitcoin and Ethereum tokens within the fund.

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A notable aspect of this offering is that the fund 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.

Expanding Franklin Templeton’s Crypto Reach

This filing marks a potential expansion of Franklin Templeton's involvement in the cryptocurrency space.

The asset manager already provides clients with exposure to spot Bitcoin and Ethereum ETFs, highlighting 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 gives investors access to FOBXX through the purchase of the BENJI BENJI/USD token, showcasing the firm's diversified approach to integrating blockchain technology into traditional finance products.

BNY Mellon’s Role In The ETF

Bank of New York Mellon is poised to play a significant role in this potential ETF, as the institution will receive its first ETF custody duties following a non-objection letter from the SEC.

This regulatory clearance allows BNY Mellon to hold digital assets, with an initial focus on Bitcoin and Ethereum ETFs.

While this exemption was granted with certain conditions, SEC Chairman Gary Gensler has indicated that BNY Mellon could expand its digital asset custody services if it adheres to specific guidelines.

For those interested in the intersection of traditional finance and digital assets, Benzinga's Future of Digital Assets event on November 19 will provide further insights and discussions with industry experts.

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