Franklin Templeton plans to introduce a Crypto Index ETF that will initially invest in Bitcoin and Ethereum to solidify its market position further.
American financial asset manager Franklin Templeton has applied to the United States Securities and Exchange Commission (SEC) to establish a Crypto Index ETF. Bitcoin and Ethereum, the two products it presently manages on US markets, will be the initial holdings of this new exchange-traded fund.
Franklin Templeton Crypto Index ETF: What is Different?
Under Gary Gensler’s leadership, numerous issuers have intensified their industry engagements since the SEC approved the Bitcoin ETF in January. Due to the new allowance, Franklin Templeton also embraced the Ethereum ETF in May.
The asset manager occupies a critical position in the sector, even though it is not one of the top-performing ETF issuers for Bitcoin or ETH. According to their data, one inflow has been recorded in the BTC ETF EZBC of Farside Investors since July 29. EZET has experienced inflows of $35 million for its ETH ETF product during the same period.
This new Crypto Index ETF Fund will be administered as a weighted offering, as indicated in its S-1 filing. As demonstrated in its filing with the SEC, the weighting will be determined by the market capitalization of the constituent components. This combined crypto index ETF fund is an unexplored territory that has the potential to assist the firm in establishing a dominant position in a specific segment of the ETF market. The firm has initiated the process of pursuing SEC approval for the Solana ETF, as evidenced by this most recent filing.
Franklin Templeton will obtain pricing data for the fund from the CF Bitcoin and Ether reference rates, as indicated in its filing. One significant issue that persists is whether the SEC will approve the product. This remains challenging to project because the filing is still relatively new.
Issuers conflict for Crypto Index Funds dominance
The spot Bitcoin and Ethereum ETF markets witnessed the disclosure of new Wall Street firms’ exposure to the assets with the recent 13-F filing. The second quarter of the year saw the disclosure of a substantial Bitcoin exposure by the banking behemoth Morgan Stanley. Goldman Sachs and other financial institutions disclosed their exposures.
Among Crypto ETF issuers, the destination of these institutional investor funds continues to be a significant challenge. BlackRock recently surpassed Grayscale as the largest issuer of Bitcoin and Ethereum ETFs. This is because the former has continued to receive inflows from Wall Street titans, whereas the latter’s outflows have not ceased.
A new level playing field may be established to redefine the competition of issuers through the implementation of combined fund offerings.
