The U.S. Securities and Exchange Commission (SEC) has granted approval for Bitcoin and Ethereum exchange-traded funds (ETFs) offered by Hashdex and Franklin Templeton. These ETFs provide a regulated investment route for institutional investors to gain exposure to the two largest cryptocurrencies, Bitcoin and Ethereum, through spot-based financial products.
This approval follows changes to exchange rules proposed by Nasdaq and Cboe BZX, which now permit the listing and trading of these ETFs. The SEC confirmed that the funds comply with the Exchange Act, implementing measures to prevent fraud and safeguard investor interests.
The Approved ETFs: Features and Structure
The approved ETFs are:
- Hashdex Nasdaq Crypto Index US ETF
- Franklin Templeton Crypto Index ETF
The Franklin Templeton ETF tracks the performance of the Institutional Digital Asset Index, which mirrors Bitcoin and Ethereum’s market performance. Hashdex’s offering follows the Nasdaq Crypto US Settlement Price Index, also focusing on Bitcoin and Ethereum. Both ETFs emphasize regulatory compliance, transparency, and protecting investors.
Initially, the Hashdex ETF will focus solely on Bitcoin and Ethereum, though it plans to include additional digital assets, potentially including XRP, in the future.
Hashdex filed for its ETF in June, though the process faced delays due to the SEC’s extended regulatory review. However, changes in U.S. political leadership may have expedited the SEC’s approval. Meanwhile, Franklin Templeton’s ETF filing was fast-tracked, adhering to established standards for commodity-based trust share products.
The SEC’s approval of these ETFs adds institutional legitimacy to the cryptocurrency sector, providing traditional investors with a way to diversify their portfolios without directly holding the underlying digital assets. This development is particularly important for financial advisors seeking regulated and transparent investment options for clients interested in cryptocurrencies.
Reactions from the Industry
ETF analyst Eric Balchunas noted that both ETFs are expected to be market cap-weighted, with around 80% allocated to Bitcoin and 20% to Ethereum. He anticipates that the funds will launch in January.
Nate Geraci, president of The ETF Store, suggested that other companies, including BlackRock, could soon offer similar products. “There will be significant demand for these ETFs. Advisors appreciate diversification, especially in a developing asset class like crypto,” he said.
On social media, artist Chad Steingraber raised the possibility of XRP being included in the Hashdex ETF, which generated excitement among crypto enthusiasts.
