In a significant development for the US cryptocurrency market, the US Securities and Exchange Commission (SEC) has approved the first crypto index exchange-traded funds (ETFs) combining Bitcoin and Ethereum. These novel financial products have been introduced by asset managers Hashdex and Franklin Templeton, and are scheduled to launch in January.
Key details of the approved ETFs
The ETFs will be based on an index reflecting the market capitalizations of the two leading cryptocurrencies, with an approximate allocation of 80% to Bitcoin and 20% to Ethereum.
The Hashdex fund, known as the Hashdex Nasdaq Crypto Index US ETF, will trade under the ticker NCIQ, while Franklin Templeton's will operate under the ticker EZPZ. Both ETFs will have BitGo and Coinbase as primary custodians, ensuring the secure management of the digital assets.
Approval process and similarities with previous ETFs
The SEC's decision follows a period of review that began when Hashdex and Franklin Templeton filed their registrations in July and August, respectively.
According to the regulator, these funds meet the requirements already established for other previously approved cryptocurrency ETFs, such as Bitcoin spot ETFs.
This regulatory consistency has been key to getting the green light in an area that has faced delays and scrutiny in the past.
Impact on the crypto market and the reaction of investors
The approval of these combined ETFs comes amid accelerating growth for the U.S. crypto ETF market. In 2024 alone, Bitcoin spot ETFs attracted over $36 billion in net flows, while Ethereum spot ETFs, which debuted in July, generated approximately $2.4 billion over the same period. Combining both cryptocurrencies could provide investors with an additional level of diversification and appeal.
Eric Balchunas, an ETF analyst at Bloomberg, commented that the diversified nature of these products can capture the interest of traditional investors and crypto enthusiasts alike, expanding access to more balanced strategies in the cryptocurrency market.
What does this approval mean for the market?
The approval of these ETFs not only represents a step forward in the regulatory acceptance of cryptocurrencies, but could also mark the beginning of a new stage for the investment strategy in digital assets.
With pioneering names like Hashdex and Franklin Templeton leading the charge, and backed by companies like BitGo and Coinbase, investors will now have a new tool to gain exposure in one of the most dynamic and volatile markets today.
This launch, scheduled for January, promises to be a key event for the crypto ecosystem and will attract the attention of investors, regulators and analysts worldwide. Will it become one of the catalysts that drive the next wave of institutional and retail adoption in the sector? Time will tell.