Franklin Templeton filed for approval of a crypto index ETF under the ticker ‘EZPZ’ with the U.S. SEC on August 16. According to Nate Geraci, Co-founder and President of the ETF Institute, the ETF would initially hold Ethereum and Bitcoin. He pointed out that adding more digital assets would require further regulatory approval.
The digital assets manager revealed that it would offer investors digital asset market exposure by tracking the CF Institutional Digital Asset Index—US—Settlement Price, which included Ethereum and Bitcoin. According to the investment firm, the ETF would trade on the Coinbase exchange.
Franklin Templeton gets ETF regulatory approval from the U.S. SEC
Franklin Templeton files for Crypto Index ETF…
Would initially hold btc & eth.
Here we go. pic.twitter.com/K3o8qI2QZq
— Nate Geraci (@NateGeraci) August 16, 2024
Franklin Templeton submitted a registration statement to the U.S. SEC for an ETF initially holding Bitcoin and Ethereum. According to the Wall Street giant, the proposed fund (Franklin Crypto Index ETF) aimed to provide investors with exposure to the two largest crypto assets under a regulated institution.
The Coinbase exchange would be the proposed fund’s custodian. Geraci confirmed that the U.S. SEC had green-lighted the fund despite reluctance to approve the stock exchange-traded crypto product. With this new filing, Franklin Templeton continues to push digital assets into the mainstream investment landscape after it launched other top cryptocurrency ETFs this year.
According to the S-1 registration form submitted by Franklin Templeton, the Bank of New York Mellon would handle cash holdings and act as the fund’s transfer agent and administrator. The investment manager revealed future plans to target a broader range of digital assets by investing in other tokens besides Ether and Bitcoin following the May approval of its Ethereum ETF.
The submitted S-1 registration form revealed that the fund’s objective was to mirror the CF Institutional Digital Asset Index—US—Settlement Price performance, allowing investors to participate in the potential growth of Ethereum and Bitcoin without the complexities of direct ownership.
The ETF’s fund management and operations to take passive approach
According to the submitted registration form, the ETF’s administrator would calculate the fund’s daily NAV (net asset value) and buy or sell its shares for clients or their accounts. Franklin Templeton affirmed that it would invest in Ethereum and Bitcoin in equal proportions to the index, although the values of the funds and the held cryptocurrencies were expected to vary in performance.
The investment firm also disclosed that the fund would take a passive approach by simply following the index and buying or selling to match the fund’s composition without trying to predict market movements at particular times. Franklin Templeton confirmed that the fund would not generate additional returns by participating in Ethereum staking activities. He also warned investors that the fund would likely underperform compared to holding Ethereum directly.
