- Franklin Templeton joins Hashdex in the crypto index fund race
- The index fund will track ETH and BTC
The $1.5 trillion asset manger Franklin Templeton is the latest player seeking to launch a crypto index ETF (exchange-traded fund). The firm filed a registration statement, S-1 form, with the U.S SEC (Securities and Exchange Commission) for an index ETF that would track Bitcoin [BTC] and Ethereum [ETH].
Part of the filing read,
“The Fund generally seeks to reflect the price of the digital assets included in the CF Institutional Digital Asset Index – US–Settlement Price (the “Underlying Index”)… The Underlying Index’s only constituent digital assets are bitcoin and ether.”
Crypto index ETF race
Market pundits have been speculating that a crypto index ETF is the next step after the top assets, BTC and ETH, got individual ETFs. In fact, Brian Armstrong, Founder of Coinbase, echoed this sentiment in the recent earnings call.
“I think these things could be really beneficial…We’d ultimately like to see a path where we could start to get index funds — retail products — in the crypto space.”
He also teased a Coinbase 500 that offers exposure to top crypto assets, similar to the S&P 500 Index, which tracks top U.S firms.
That being said, Armstrong acknowledged that regulatory challenges could delay such a vision, given that BTC and ETH are the only assets with regulatory clarity at the moment.
Meanwhile, Nate Geraci clarified that Franklin Templeton’s crypto index fund (EZPZ) could only include extra assets like Solana [SOL] with regulatory approval.
“Would require regulatory approval to hold any additional digital assets…”
So far, Hashdex is the first to show interest in a U.S crypto index fund. The SEC’s decision on Hashdex’s application deadline is September 2024.
Franklin Templeton’s move is a sign that the space could hit up soon, at least for those seeking collective exposure to BTC and ETH.
Approval will only happen if the SEC signs off on both the S-1 (registration statements) and the exchanges’ 19b 4b (rule changes). If approved, these would be the United States’ first publicly-traded crypto index funds.
However, it is worth noting that Bitwise already has a crypto index fund, Bitwise 10 Crypto Index Fund (BITW), tracking the top 10 assets. Right now, the fund is only available privately to approved clients and not on major exchanges like NYSE or Nasdaq though.