Yesterday’s crypto market saw some turbulence, but it was met with positive news from the US Securities and Exchange Commission (SEC). They have approved the very first ever dual Bitcoin (BTC) and Ethereum (ETH) index exchange-traded funds (ETFs). These ETFs are brought to you by Franklin Templeton and Hashdex, and they are scheduled to launch in January 2025.
This marks a significant milestone for the crypto industry as it’s the first time the SEC has approved hybrid Bitcoin-Ethereum index ETFs. The Hashdex Crypto Index ETF will trade on Nasdaq, while the Franklin Templeton Crypto Index ETF will be listed on the Cboe BZX Exchange. Both ETFs will hold spot BTC and ETH in proportions reflecting their respective market capitalizations, currently resulting in an 80:20 ratio favoring Bitcoin.
However, they may expand to include other cryptocurrencies in the future, subject to regulatory approval. Interestingly, the SEC noted that Franklin Templeton’s December 18 filing received expedited approval. When asked about this development, Nate Geraci, President of The ETF Store, commented, “Will be interesting to see if BlackRock or others attempt to piggyback on this and launch similar ETFs.
Regardless, I expect there will be meaningful demand for these products. Advisors love diversification. Especially in an emerging asset class such as crypto.”
Geraci pointed out that the approval of these ETFs aligns with previous decisions made by the SEC regarding spot Bitcoin and spot Ethereum ETFs in terms of trust structure and operating terms.
He also mentioned that the SEC noted that both ETFs complied with the criteria set forth by the Exchange Act, which requires issuers to implement safeguards against fraud, manipulation, and risks to investors. Hashdex first amended its S-1 filing with the SEC in October, and submitted a second amended application on November 25.
Meanwhile, Franklin Templeton filed its S-1 for the crypto index ETF in August. Both companies stated that other digital assets like Avalanche (AVAX), Chainlink (LINK), and Litecoin (LTC) may meet their eligibility criteria and could be added to the ETF in the future subject to regulatory approval.
It’s worth noting that Hashdex’s ETF will utilize custodial services from Coinbase, BitGo, Fidelity, and Gemini. Similarly, Franklin Templeton’s ETF will use BitGo and Coinbase as its primary custodians. This move towards more regulated crypto products has been gaining traction globally, with many countries showing interest in creating their own versions of crypto ETFs.
At the time of writing, BTC was trading at $95,824, down 4.8% in the last 24 hours. Despite this slight dip, the overall sentiment remains positive with many anticipating further growth in the crypto industry and the potential for more regulated products like these ETFs.
Source
As per reported by www.bitcoininsider.org
