- Franklin Templeton has proposed a Bitcoin and Ethereum index ETF, combining the two assets into a single fund.
- Hashdex plans to launch a revolutionary ETF directly holding Bitcoin and Ethereum.
In a remarkable development, Franklin Templeton Investments, a major billion-dollar asset manager, has submitted a proposal to the United States Securities and Exchange Commission (SEC) to create an index-based exchange-traded fund (ETF). Bitcoin (BTC) and Ethereum (ETH). ).
If approved, this initiative would allow the global investment firm to merge BTC and ETH into a single fund, providing investors with a streamlined way to gain exposure to both digital assets.
The proposed ETF would include Bitcoin, Ethereum and cash equivalents – short-term securities maturing in less than three months – allowing investors to engage in these cryptocurrencies without directly owning them.
Source: sec.gov
Strangely, this proposal appeared at a time when overall BTC ETFs were seeing outflows worth $52.9 million, while ETH ETFs were seeing inflows of $19.8 million according to Farside Investors.
How will this impact the crypto market?
That being said, Franklin Templeton’s proposed Bitcoin and Ethereum Crypto Index ETF would be the first-ever fund to combine both BTC and ETH in a single index product.
According to the filing, the ETF is designed to streamline the investment process for institutional and retail investors, providing them with simplified access to the two largest cryptocurrencies by market capitalization.
Making the same point, an X user said:
Source: Puppeteer/X
As expected, this step would also alleviate the complexity and volatility often associated with cryptocurrency trading.
What more is there?
The fund will be available in blocks of 50,000 shares, priced based on the net asset value (NAV) of the underlying Bitcoin and Ethereum.
Notably, the ETF will not engage in staking or other income-generating activities with its digital assets, thus maintaining a simple approach to crypto investing.
Providing additional information, the filing states,
“CSC Delaware Trust Company, a subsidiary of Corporation Service Company, is the trustee (“Trustee”). Bank of New York Mellon is the custodian of cash and cash equivalents16 of the Fund (the “Cash Custodian”) and also serves as administrator and transfer agent of the Fund (the “Administrator” or “the Transfer Agent”).
He further added,
“Coinbase Custody Trust Company, LLC (the “Digital Custodian”) will be responsible for the custody of the Bitcoins and Ethers of the Fund. According to the registration statement, each share will represent a fractional undivided beneficial interest in the net assets of the Fund.
However, final approval of the fund depends on the SEC’s assessment, particularly regarding anti-fraud measures.
As a reminder, the SEC generally only approves crypto ETFs after confirming that strong safeguards are in place to prevent fraud and market manipulation in regulated futures markets.
Hashdex Crypto Index ETF Proposal
Well, Franklin Templeton is not alone as in July, Hashdex, a major crypto asset management company, also made notable progress towards launching a pioneering ETF that will directly hold both BTC and spot ETH.
The company also submitted its S-1 registration statement to the US SEC, positioning the Hashdex Nasdaq Crypto Index US ETF as a potential game-changer in the US market.
