- The SEC has approved Bitcoin and Ether index ETFs from Hashdex and Franklin Templeton, marking a key milestone in crypto integration with traditional finance.
- Hashdex’s ETF will trade on the Nasdaq, and Franklin Templeton’s on the Cboe BZX Exchange, both offering direct exposure to Bitcoin and Ether.
- The ETFs’ approval reflects growing regulatory comfort with crypto-based financial products, aiming to ensure investor protection and market integrity.
The United States Securities and Exchange Commission (SEC) has taken a landmark step in approving Bitcoin and Ether index exchange-traded funds (ETF) made available by the asset managers Hashdex and Franklin Templeton. It marks a new chapter in the integration of cryptocurrency with traditional financial markets.
In a notice issued on December 19, the SEC granted approval for Hashdex’s Nasdaq Crypto Index US ETF and Franklin Templeton’s Franklin Crypto Index ETF. The Hashdex ETF will be traded on the Nasdaq stock market, while the Franklin ETF will debut on the Cboe BZX Exchange. Both ETFs are structured to include spot Bitcoin (BTC) and spot Ether (ETH), offering investors direct exposure to these leading digital assets.
The Hashdex ETF tracks the Nasdaq Crypto US Settlement Price Index, which is meant to headline the performance of Bitcoin and Ether. Similarly, the Franklin Crypto Index ETF follows the Institutional Digital Asset Index, which benchmarks the performances of key digital assets, including Bitcoin and Ether. In any case, the unique structures and underlying assets are likely to make the ETFs highly popular.
SEC Approves Franklin Templeton Crypto ETFs
Franklin Templeton’s December 18 filing received accelerated approval from the SEC, indicating the regulator’s growing comfort with crypto-based financial products. The commission noted that both ETFs were approved based on their alignment with the Exchange Act’s stringent requirements, including provisions to prevent fraud, protect investors, and ensure market integrity. The trusts’ structures and operational terms were deemed “substantially similar” to previously approved spot Bitcoin and Ether exchange-traded products.
Nate Geraci, president of The ETF Store, highlighted the potential ripple effects of the SEC’s decision. In a December 19 post on X (formerly Twitter), he speculated that industry giants like BlackRock might follow suit, capitalizing on the momentum to launch similar crypto ETFs.
“Will be interesting to see if BlackRock or others attempt to piggyback on this & launch similar ETFs,” Geraci remarked. “Regardless, I expect there will be meaningful demand for these products. Advisers LOVE diversification, especially in an emerging asset class such as Digital Currency.”
Crypto ETFs Gain Momentum with SEC Nod
The road to approval has not been without its twists and turns. Franklin Templeton originally submitted its crypto index ETF back in August but received a delay from the SEC on Nov. 20. Meanwhile, Hashdex submitted its second-amended application on Nov. 25, after an earlier amendment in October was at the request of the SEC for more time.
Despite these challenges, both firms’ persistence paid off, marking a pivotal moment in the crypto ETF landscape. Other firms like Bitwise and Grayscale have also filed notices for launching crypto index ETFs, signaling competitiveness and rapid evolution in the market.
The approval of these ETFs underlines the growing maturity of the Digital Currency market and its acceptance within traditional financial systems. These ETFs will offer investors regulated and diversified exposure to Bitcoin and Ether and are expected to fuel broader adoption and further improve the credibility of digital assets as an investment class.
While the cryptocurrency market is in a growth phase, this decision made by the SEC could mark the beginning of more unique financial products and help tie traditional finance closer to a rapidly growing world of digital assets.
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