The U.S. Securities and Exchange Commission (SEC) has approved the first-ever dual Bitcoin and Ethereum Exchange-Traded Funds (ETFs), introduced by Hashdex and Franklin Templeton. This development provides institutional investors with simplified access to the two largest cryptocurrencies through spot-based investment options.
The Franklin Templeton Crypto Index ETF and Hashdex Nasdaq Crypto Index US ETF both received regulatory clearance. Franklin Templeton’s filing was approved faster than expected, thanks to its alignment with commodity-based trust standards. Rule changes by Nasdaq and Cboe BZX also contributed to enabling these funds’ listings. Initially, the Hashdex ETF will focus on Bitcoin and Ethereum but could eventually include other assets, like XRP.
This approval follows earlier delays, as the SEC postponed decisions on Hashdex’s June filing twice. Analysts believe upcoming leadership changes in Washington accelerated the approvals. The launch of these ETFs is anticipated for January 2024, with portfolios weighted by market capitalization—roughly 80% Bitcoin and 20% Ethereum. ETF analyst Eric Balchunas noted that this milestone is significant for both Franklin Templeton and Hashdex.
Crypto markets remain highly volatile. Bitcoin’s price recently dropped over 8%, plunging from $105,000 to below $96,000, leading to more than $1 billion in crypto liquidations within 24 hours. Despite this, the approval of these ETFs signals growing mainstream adoption and regulatory acceptance of digital assets.
Industry experts predict Litecoin ETFs could be the next to gain approval. As a Bitcoin fork, Litecoin aligns with U.S. regulatory standards, making it a potential candidate for classification as a commodity. However, demand from institutional investors may be limited. Meanwhile, ETFs for Solana and XRP may face further delays due to ongoing uncertainties.
The SEC’s attitude toward crypto appears to be shifting. Recent changes in leadership, including the non-renewal of Commissioner Caroline Crenshaw, signal a potential softening of the agency’s historically strict approach. Crenshaw, a supporter of SEC Chair Gary Gensler’s anti-crypto stance, will leave her position in January. With Paul Atkins taking on a leadership role, the SEC might adopt a more favorable view of crypto ETFs in the future.
These developments highlight a growing acceptance of cryptocurrency in traditional finance, despite market fluctuations and lingering regulatory challenges. The approval of dual Bitcoin and Ethereum ETFs could pave the way for further advancements in the crypto investment landscape.
