- Franklin Templeton proposed a Bitcoin and Ethereum index ETF, combining both assets into one fund.
- Hashdex plans to launch a groundbreaking ETF that directly holds Bitcoin and Ethereum.
In a remarkable development Franklin Templeton Investmentsa prominent trillion-dollar asset manager, has submitted a proposal to the US Securities and Exchange Commission (SEC) to establish a Bitcoin platform. [BTC] and ether [ETH] index exchange traded fund (ETF).
If approved, this initiative would allow the global investment firm to merge BTC and ETH into a single fund, giving investors a streamlined way to gain exposure to both digital assets.
The proposed ETF would include Bitcoin, Ethereum and cash equivalents – short-term securities with maturities of less than three months – allowing investors to interact with these cryptocurrencies without owning them directly.
Source: sec.gov
Strangely enough, this proposal arose during a period when the whole BTC ETFs recorded an outflow worth $52.9 million, while ETH ETFs saw an inflow of $19.8 million according to Farside Investors.
What impact will this have on the crypto market?
That said, Franklin Templeton’s proposed Bitcoin and Ethereum Crypto Index ETF would be the first fund ever to combine both BTC and ETH into one index product.
According to the filing, the ETF is designed to streamline the investment process for both institutional and retail investors, providing them with simplified access to the two largest cryptocurrencies by market capitalization.
An X user said the same thing about this:
Source: Puppeteer/X
As expected, this move would also alleviate the complexity and volatility often associated with cryptocurrency exchanges.
What else is going on?
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, maintaining a simple approach to crypto investing.
Providing further insights, the filing noted:
“CSC Delaware Trust Company, a subsidiary of the Corporation Service Company, is the trustee (“Trustee”). Bank of New York Mellon is the custodian of the Fund’s cash and cash equivalents16 (the “Cash Custodian”) and also serves as the Fund’s administrator and transfer agent (the “Administrator” or “Transfer Agent”).
It further added,
“Coinbase Custody Trust Company, LLC (the “Digital Custodian”) will be responsible for the custody of the Fund’s bitcoin and ether. According to the Registration Statement, each Share represents a fractional, undivided economic interest in the net assets of the Fund.”
However, the fund’s final approval depends on the SEC’s evaluation, particularly regarding anti-fraud measures.
For context, the SEC typically only approves crypto ETFs after confirming that robust safeguards are in place to prevent fraud and market manipulation in regulated futures markets.
Hashdex’s Crypto Index ETF Proposal
Well, Franklin Templeton isn’t alone, as in July, Hashdex, a leading crypto asset management company, also made notable progress towards launching a groundbreaking ETF that will hold both spot BTC and ETH.
The company has also submitted its views 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.