Crypto news: Franklin Templeton files S-1 for new cryptocurrency index ETF
Asset manager Franklin Templeton is planning to launch a new exchange-traded fund (ETF) aimed at providing a comprehensive crypto portfolio, according to an August 16 filing.
The proposed Franklin Templeton Crypto Index ETF will track the performance of the CF Institutional Digital Asset Index, which currently includes only Bitcoin (BTC) and Ethereum (ETH), as stated in the filing.
“The Fund will seek to achieve its investment objective by investing in the Digital Assets in approximately the same weights as they represent in the Underlying Index,” the filing noted. It also indicated that the ETF might include additional cryptocurrencies in the future.
The Franklin Templeton Crypto Index ETF is among the early entrants in the emerging market for crypto index ETFs, which have become a new focus for crypto ETF issuers following the launch of Bitcoin and Ether ETFs in January and July, respectively. It will compete with the Hashdex Nasdaq Crypto Index ETF, the first crypto index ETF to seek regulatory clearance.
“The next logical step is index ETFs because indices are efficient for investors—just like how people buy the S&P 500 in an ETF. This will be the same in crypto,” said Katalin Tischhauser, head of investment research at crypto bank Sygnum, in an interview with Cointelegraph.
Tischhauser explained that crypto index ETFs are currently limited to BTC and ETH because these are the only digital assets the Securities and Exchange Commission (SEC) has approved for inclusion in ETFs so far. “They intend it to be an index, and as long as only Bitcoin and Ethereum are approved, that’s what it will consist of,” she said, adding that there is limited demand for new types of single-asset ETFs, such as a Solana (SOL) ETF.
Grayscale, the largest crypto fund issuer with $25 billion in assets under management (AUM), has also expressed interest in entering the crypto index ETF market. “We’re going to see a number of more single asset products, and then also certainly some index-based and diversified products,” said Dave LaValle, Grayscale’s global head of ETFs, on August 12.
Before the ETF can be traded on exchanges, the SEC must approve its registration application—known as an S-1—and allow at least one public equities exchange, such as Nasdaq, to list the product.
