SEC Gives Green Light to First Bitcoin-Ethereum Hybrid Mutual Funds from Franklin Templeton and Hashdex

Amid the decline in the cryptocurrency market yesterday, the US Securities and Exchange Commission (SEC) announced… consent The first ever Bitcoin (BTC) and Ethereum (ETH) binary index exchange traded funds (ETFs) from Franklin Templeton and Hashdex. The ETFs are scheduled to launch in January 2025.

SEC Approves First Bitcoin-Ethereum Dual Index ETFs

For the first time, the US financial regulator has approved Bitcoin-Ethereum hybrid index ETFs. Hashdex’s Crypto Index ETF will be traded on the Nasdaq, while Franklin Templeton’s Crypto Index ETF will be listed on the Cboe BZX exchange.

Both BTC and ETH ETFs will hold ratios that reflect their respective market caps, currently resulting in a ratio of 80:20 in favor of Bitcoin. However, the ETFs may expand to include other cryptocurrencies in the future, pending regulatory approval.

The SEC highlighted that Franklin Templeton’s Dec. 18 filing received expedited approval. Commenting on the development, Nate Geraci, Head of ETF Shop, said: He said:

It will be interesting to see if BlackRock or others try to exploit this and launch similar ETFs. Regardless, I expect there will be a huge demand for these products. Advisors love diversification. Especially in an emerging asset class like cryptocurrencies.

Geraci emphasized the potential rationale behind the SEC’s decision to approve cryptocurrency index ETFs, noting their similarities to previously approved spot Bitcoin ETFs and Ethereum ETFs in terms of trust structure and operating conditions.

The SEC added that the proposals for each of the ETFs comply with the standards set forth in the Exchange Act. For starters, the Exchange Act requires issuers to implement safeguards against fraud, manipulation, and risks to investors.

Details about Cryptocurrency Index ETFs

Asset management firm Hashdex first amended its S-1 filing with the SEC in October, and filed a second amended application on November 25. Franklin Templeton filed its S-1 application for a cryptocurrency index ETF in August.

In a November Hashdex filing, the company stated that other digital assets, such as Avalanche (AVAX), Chainlink (LINK), and Litecoin (LTC), may meet its eligibility criteria and could be added to the ETF in the future with regulatory approval. The Franklin Templeton ETF also leaves room to add other cryptocurrencies, but did not identify any by name.

Notably, the Hashdex ETF will rely on custodial services from Coinbase, BitGo, Fidelity, and Gemini. Likewise, the Franklin Templeton ETF will use BitGo and Coinbase as its primary custodians.

The cryptocurrency ETF space has become increasingly competitive, thanks to their incredible success since their founding He releases Earlier this year. Experts opinion US cryptocurrency ETFs may soon overtake spot gold ETFs in terms of net assets held.

After the United States, other countries in the world are also moving steadily Warm up For the idea of ​​regulated crypto ETFs. At press time, Bitcoin is trading at $95,824, down 4.8% over the past 24 hours.

Featured image from Unsplash.com, chart from TradingView.com