Multinational asset manager Franklin Templeton has recently submitted an amended S-1 filing for its Franklin Crypto Index ETF, seeking approval to gradually add tokens to the fund. The filing, submitted on Thursday, states that the exchange-traded fund will initially track Bitcoin and Ethereum, with a weighting of 86.31% for BTC and 13.69% for ETH.
The filing does not commit to adding any other cryptocurrencies, stating that it is uncertain whether any digital assets other than Bitcoin and Ethereum may be added to the Underlying Index in the future. However, it also does not rule out additions, suggesting that more tokens could be included as and when the SEC permits.
According to the S-1 form, the Underlying Index only includes digital assets that comply with the prevailing capital markets regulations of major financial jurisdictions, including the United States. Franklin Templeton further specifies in the application that they would require SEC approval or permission for a given token before adding it to the Franklin Crypto Index ETF.
Franklin Templeton already offers a Bitcoin ETF, which was among the first batch of ETFs to receive SEC approval in January 2024. Currently valued at $743.7 million, the company’s Bitcoin ETF has been successful. Additionally, its Ethereum ETF has a value of $33.9 million.
If approved, the Franklin Crypto Index ETF will also be listed on the Cboe BZX Exchange. Some commentators see this as a significant breakthrough, potentially paving the way for institutional and everyday investors to gain exposure to digital assets without being correlated to a specific asset.
Jeff Hancock, CEO and co-founder of Coinpass, describes the launch of multi-currency ETFs as inevitable and believes it would bring much-needed liquidity to the market. He also emphasizes that such ETFs would provide institutions with unlimited options for asset allocation.
Franklin Templeton had previously gained approval for the original version of the fund, which exclusively invested in Bitcoin and Ethereum. The SEC granted accelerated approval for Franklin’s application, intending to fast-track the ETF for listing. A similar process occurred at the end of January for the Bitwise Bitcoin and Ethereum ETF, which is currently undergoing the S-1 review process.
The same applies to Hashdex’s Nasdaq Crypto Index US ETF, which will also invest in BTC and ETH. These filings coincide with applications for ETFs involving cryptocurrencies other than Bitcoin and Ethereum. Bitwise and Grayscale filed for Dogecoin ETFs in January, while four firms have filed for XRP ETFs in the past 24 hours alone.
Investment firms have increased their crypto ETF applications following the election of Donald Trump, who appointed the pro-crypto Paul Atkins as chair of the SEC. This has led to the belief that the SEC is more inclined to approve such applications. Cryptocurrency analyst and author Glen Goodman shares this view, stating that not only will the Franklin Crypto Index ETF be approved by the SEC, but Atkins’ appointment will make it much easier to gain approval for crypto-focused investment vehicles.