The United States Securities and Exchange Commission has approved two spot cryptocurrency index exchange-traded funds.
On Dec. 18, the SEC greenlighted the crypto index ETF proposal from Franklin Templeton, allowing it to trade on the Cboe BZX Exchange. The following day, the commission approved Hashdex’s crypto index ETF, which is set to trade on the Nasdaq stock market.
Franklin Templeton’s proposal was granted “accelerated approval” after its updated filing met the necessary requirements and was deemed “substantially similar” to previously approved spot Bitcoin and Ether exchange-traded products.
Crypto index ETFs track the performance of multiple cryptocurrencies, offering investors diversified exposure to the digital asset market through a single investment vehicle. It replicates the performance of an underlying index by holding the same assets in similar proportions.
Hashdex’s Crypto Index ETF will track the Nasdaq Crypto US Settlement Price Index, while Franklin Templeton’s product mimics the performance of the Institutional Digital Asset Index, both of which primarily focus on spot Bitcoin and Ether.
Franklin Templeton submitted its filing for the Franklin Crypto Index ETF in August, while Hashdex initially filed its S-1 in June and later submitted an amended application on Nov. 25.
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The SEC had previously requested more time to evaluate both proposals, citing the need for a thorough assessment. Hashdex and Franklin Templeton addressed these concerns by submitting revised filings, which the commission, in its Dec. 19 notice, stated were consistent with regulatory requirements designed to prevent fraud and manipulation, protect investors, and ensure the integrity of the market.
According to Bloomberg analyst Eric Balchunas, the funds are “likely” to go live in January, with Bitcoin making up about 80% and Ether 20% of the holdings.
With the first crypto index funds approved, experts like ETF Store President Nate Geraci believe more issuers will follow suit, anticipating “meaningful demand” for such products as advisors seek diversification.
Last month, Bitwise filed a proposal with the SEC to launch a spot Bitcoin and Ether ETP on the NYSE Arca. The fund aims to provide investors with balanced exposure to the two largest crypto assets in an accessible format, according to a Nov. 26 statement from the asset manager.
These developments coincide with upcoming leadership changes at the SEC, as Chair Gary Gensler has announced his resignation, effective January 20, 2025, the day President-elect Donald Trump is set to take office.
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