Franklin Templeton, a leading asset management firm, has officially submitted a filing to the U.S. Securities and Exchange Commission (SEC) for a multi-asset cryptocurrency exchange-traded fund (ETF). This move marks another significant step in the growing adoption of crypto ETFs in the financial market.
Franklin Crypto Index ETF Overview
The proposed Franklin Crypto Index ETF aims to provide investors with direct exposure to Bitcoin (BTC) and Ether (ETH), the two largest cryptocurrencies by market capitalization. According to the filing dated February 6, the ETF would be listed on the Cboe BZX Exchange, with assets weighted based on their market cap. At the time of submission, the index was composed of 86.31% BTC and 13.69% ETH.
To maintain an optimal balance, the ETF is designed to be rebalanced on a quarterly basis in March, June, September, and December. Franklin Templeton has also hinted at the potential inclusion of additional cryptocurrencies in the future, pending regulatory approvals.
Surge in Crypto ETF Applications
Franklin Templeton’s move follows Bitwise Asset Management’s January 31 application for a similar ETF, the Bitwise Bitcoin and Ethereum ETF. A wave of crypto ETF filings has emerged since the inauguration of President Donald Trump, accompanied by shifts in the SEC’s leadership, including the resignation of former Chair Gary Gensler on January 20.
The growing demand for regulated crypto investment vehicles highlights the increasing mainstream acceptance of digital assets. However, despite this progress, Franklin Templeton emphasized that there is no assurance that any cryptocurrencies beyond BTC and ETH will be included in the ETF unless regulatory conditions allow.
Challenges and Market Competition
The filing also acknowledges potential risks, including competition from other digital assets such as Solana (SOL), Avalanche (AVAX), and Cardano (ADA). These emerging cryptocurrencies could impact investor demand for the Franklin Crypto Index ETF. Despite rising interest in Solana-based ETFs, industry analyst James Seyffart suggests that SEC approval for Solana ETFs may not come before 2026, given the regulator’s historically slow review process.
In addition, on the same day as Franklin Templeton’s filing, the Cboe BZX Exchange submitted 19b-4 applications for spot XRP ETFs from four different asset managers: Canary Capital, WisdomTree, 21Shares, and Bitwise. This highlights the continued push for more cryptocurrency ETFs in the U.S. market.
Regulatory Landscape and Future Outlook
Under the leadership of Acting SEC Chair Mark Uyeda, who is considered more open to crypto, there are signs of a possible regulatory shift. Uyeda recently brought in a policy director from Coin Center, a prominent crypto advocacy group, to the SEC’s Crypto Task Force. This move signals a potential easing of restrictions for future crypto-related financial products.
As regulatory frameworks evolve, asset managers are increasingly positioning themselves to capitalize on the demand for crypto ETFs. If Franklin Templeton’s filing gains approval, it could pave the way for further institutional adoption and innovation within the digital asset investment space.
