Key Takeaways
Why is this expansion happening now?
A new SEC-approved Cboe rule allows crypto ETFs to hold a broader range of tokens, as long as they appear in their benchmark index.
How will the ETF operate under the new rules?
The fund is rebalanced every three months and now allows in-kind creation and redemption using actual digital assets.
As institutions race to expand their presence in the altcoin ETF arena, Franklin Templeton is making a bold move of its own.
In a recent SEC submitthe asset management giant unveiled plans to expand the scope of its Franklin Crypto Index ETF, adding XRP, Solana and Dogecoin to a portfolio that already includes Bitcoin and Ethereum.
Franklin Templeton opens its gates to altcoin ETFs
From December 1, the fund will track an expanded basket of digital assets.
That said, Franklin Templeton’s expansion plans flow directly from new rules adopted by the Cboe exchange and approved by the US SEC.
The new rules would now allow crypto-linked ETFs to hold a broader range of tokens, as long as these assets are included in their benchmark index.
Which altcoins were included?
Under the updated framework, Ripple [XRP]Solana [SOL]Dogecoin [DOGE]Cardano [ADA]Stellar [XLM]and Chainlink [LINK] will be held in quantities strictly determined by the index provider.
This will ensure that the ETF reflects its benchmark and is not dependent on discretionary selection by the issuer.
The fund will also be rebalanced every three months, meaning positions may change depending on market conditions or index updates.
Market action reflected that energy
The expansion comes less than a day after Franklin launched its spot XRP product, the XRPZ trust, with a 0.19% sponsorship fee.
At the same time also shades of gray introduced its no-fee GXRP ETF, indicating increasing competition as both companies rush to capture demand for XRP and other altcoins in the growing ETF market.
This coincided with XRP trade at $2.24, up 8.61% over 24 hours, Solana to rise to $137.79, up 5.54%, while Dogecoin to climb to $0.1507, up 3.01%, according to CoinMarketCap.
Still, the ETF flow data paints a mixed picture.
Franklin Templeton’s Bitcoin [BTC] and ether [ETH] ETFs recorded zero flows on both November 21 and 24, indicating subdued investor activity around their flagship products.
Grayscale’s BTC ETF also saw no flows on November 24, despite raising $61.5 million inflow on November 21, while the broader Grayscale Bitcoin product added $84.9 million.
Grayscale’s ETHE fund recorded flat flows on both days, but the other Ethereum fund saw modest results inflow from $7.7 million on November 21 and $9.8 million on November 24.
Solana’s Grayscale ETF, GSOL, continued to show traction despite the absence of an alternative to Franklin Templeton, which grossed $1.14 million on November 21 and $4.7 million on November 24.
What’s more?
All of these latest filings, launches, and uneven market reactions show a changing ETF landscape where Bitcoin and Ethereum are no longer the sole focus.
Flow data shows that sentiment remains fragile.
So the contrast between Bitcoin and Ethereum outflows and growing interest in altcoin ETFs suggest that investors may be quietly moving toward a broader crypto mix as volatility increases.