Key Points
- Franklin Templeton Investments has proposed a Bitcoin and Ethereum index exchange-traded fund (ETF) to the U.S. SEC.
- Hashdex is also planning to launch an ETF that directly holds Bitcoin and Ethereum.
Franklin Templeton Investments, a well-known asset management firm, has put forth a proposal for a Bitcoin and Ethereum index ETF to the U.S. Securities and Exchange Commission (SEC).
The intention of this initiative is to integrate Bitcoin and Ethereum into one fund, thereby offering investors an efficient method to invest in both digital currencies.
The Proposed ETF
The ETF suggested includes Bitcoin, Ethereum, and cash equivalents. This allows investors to interact with these cryptocurrencies without having to own them directly.
Interestingly, this proposal comes at a time when Bitcoin ETFs experienced outflows of $52.9 million, while Ethereum ETFs saw inflows of $19.8 million, according to Farside Investors.
Impact on the Crypto Market
The proposed Bitcoin and Ethereum Crypto Index ETF by Franklin Templeton would be the first fund to merge Bitcoin and Ethereum into a single index product.
The ETF aims to simplify the investment process for both institutional and retail investors by providing easy access to the two largest cryptocurrencies by market capitalization.
This move would also help reduce the complexities and volatility often associated with cryptocurrency exchanges.
The fund will be offered in blocks of 50,000 shares, priced based on the net asset value (NAV) of the underlying Bitcoin and Ethereum.
The ETF will not participate in staking or other income-generating activities with its digital assets, maintaining a straightforward approach to crypto investment.
The final approval of the fund depends on the SEC’s assessment, particularly regarding anti-fraud measures.
The SEC usually approves crypto ETFs only after ensuring that robust safeguards are in place to prevent fraud and market manipulation in regulated futures markets.
Hashdex’s Proposal
In July, Hashdex, a notable crypto asset management firm, made significant progress towards launching an ETF that will directly hold both spot Bitcoin and Ethereum.
The firm submitted its S-1 registration statement to the U.S. SEC, positioning the Hashdex Nasdaq Crypto Index US ETF to potentially revolutionize the U.S. market.
