The United States Securities and Exchange Commission (SEC) has approved two new crypto-focused exchange-traded funds (ETFs) from asset managers Hashdex and Franklin Templeton. Both ETFs will provide exposure to Bitcoin and Ether, marking a significant step forward in cryptocurrency integration into traditional financial markets.
Details of the Approved ETFs
The SEC approved Hashdex’s Nasdaq Crypto Index US ETF, which will trade on the Nasdaq stock market, and Franklin Templeton’s Franklin Crypto Index ETF, set to trade on the Cboe BZX Exchange. Both ETFs will track the performance of Bitcoin and Ether using different index benchmarks:
- Hashdex’s ETF follows the Nasdaq Crypto US Settlement Price Index.
- Franklin Templeton’s ETF is tied to the Institutional Digital Asset Index, designed to measure the performance of digital assets like Bitcoin and Ether.
These approvals came after the firms submitted amended filings that aligned with previously approved proposals for spot Bitcoin and Ether exchange-traded products (ETPs).
SEC Approval Requirements
The SEC approved the ETFs on December 19, stating that the filings met the necessary requirements of the Exchange Act. These criteria ensure that issuers have safeguards in place to prevent fraud and manipulative practices, while also protecting investors and public interests. Franklin Templeton’s application was approved on an “accelerated basis,” according to the SEC notice.
Potential Impact on the ETF Market
The approval of these ETFs could pave the way for other firms to follow suit. Nate Geraci, president of The ETF Store, speculated on X (formerly Twitter) that major players like BlackRock might pursue similar ETF offerings.
“Advisers love diversification, especially in an emerging asset class such as crypto,” Geraci noted, suggesting there could be strong demand for these products among institutional and retail investors.
Other Crypto ETF Developments
Franklin Templeton and Hashdex are not alone in their push for crypto ETFs:
- NYSE Arca has expressed interest in listing several crypto ETFs, including one from Grayscale that would hold a basket of spot cryptocurrencies.
- Bitwise submitted a request on November 26 for an ETF tracking both Bitcoin and Ether.
- Grayscale’s ETF proposal, targeting a broader range of digital assets, is still under consideration by U.S. regulators.
These approvals follow years of regulatory uncertainty and delays, with the SEC repeatedly postponing decisions on crypto ETFs, including Franklin Templeton’s original filing in August 2023.
