SEC Simultaneously Approves Hashdex and Franklin’s Bitcoin and Ethereum Exchange-Traded Funds
In a major development for the cryptocurrency space, the United States Securities and Exchange Commission (SEC) has given the green light to Hashdex and Franklin Templeton’s respective Bitcoin and Ether index exchange-traded funds (ETFs). This decision marks a significant milestone for institutional investors seeking exposure to cryptocurrencies.
Hashdex’s Nasdaq Crypto Index US ETF Receives Approval
On December 19, the SEC approved Hashdex’s Nasdaq Crypto Index US ETF, which will trade on the Nasdaq stock market. The regulator also gave its nod to Franklin Templeton’s Franklin Crypto Index ETF, which is set to list on the Cboe BZX Exchange.
Key Features of the Approved ETFs
- Both indexes will hold spot Bitcoin (BTC) and spot Ether (ETH).
- Hashdex’s Crypto Index ETF will track the Nasdaq Crypto US Settlement Price Index.
- The Franklin Crypto Index ETF tracks the Institutional Digital Asset Index, a benchmark designed to represent the performance of digital assets such as Bitcoin and Ether.
SEC Approves on an ‘Accelerated Basis’
The SEC said Franklin Templeton’s updated December 18 filing was approved on an ‘accelerated basis.’ Both approvals were based on the amended filings, the trusts’ structures, and the operation terms from both firms being ‘substantially similar’ to spot Bitcoin ETP and spot Ether ETP proposals already approved under previous SEC orders.
Why This Matters
The approval of these ETFs is a significant step forward for institutional investors seeking exposure to cryptocurrencies. As Nate Geraci, president of The ETF Store, an investment adviser specializing in ETFs, noted:
"Will be interesting to see if BlackRock or others attempt to piggyback on this & launch similar ETFs… Regardless, I expect there will be meaningful demand for these products. Advisers LOVE diversification. Especially in an emerging asset class such as crypto."
Background and Context
- In August, Franklin Templeton applied to the SEC for approval of its crypto index ETF, but the regulatory agency delayed the decision on November 20.
- Asset manager Hashdex submitted its second amended application for an ETF on November 25. It filed its first amended S-1 in October after the SEC asked for more time to decide whether to authorize the proposal.
Competing Firms Show Interest
Franklin Templeton and Hashdex were not the only firms looking to launch a crypto index ETF in the United States this year. On November 26, the securities exchange NYSE Arca requested to list a Bitwise ETF holding both Bitcoin and Ether.
- In October, NYSE Arca also expressed interest in listing a Grayscale crypto index ETF holding a diverse basket of spot crypto.
- US regulators indicated they were considering the listing for approval.
Implications and Future Developments
The SEC’s approval of these ETFs is expected to inspire other firms to launch similar products. As Geraci noted, "Advisers LOVE diversification. Especially in an emerging asset class such as crypto."
This development has significant implications for institutional investors seeking exposure to cryptocurrencies. With the launch of these ETFs, investors will have more options to gain exposure to Bitcoin and Ether.
Conclusion
The SEC’s approval of Hashdex and Franklin Templeton’s respective Bitcoin and Ether index exchange-traded funds (ETFs) marks a significant milestone for institutional investors seeking exposure to cryptocurrencies.
This development has significant implications for the cryptocurrency space. With the launch of these ETFs, investors will have more options to gain exposure to Bitcoin and Ether.
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