Michaela Alvez
The U.S. Securities and Exchange Commission (SEC) has approved Bitcoin and Ethereum index exchange-traded funds (ETFs) from Hashdex and Franklin Templeton.
After several months of review, the SEC has approved the first spot ETFs that combine Bitcoin and Ethereum. On December 19, Hashdex’s Nasdaq Crypto Index US ETF received approval to trade on the Nasdaq Stock Market, while the Franklin Crypto Index ETF was cleared for the Cboe BZX Exchange.
Both ETFs will hold spot Bitcoin and Ether. The Franklin Crypto Index ETF will follow the Institutional Digital Asset Index, a benchmark that tracks the performance of digital assets like Bitcoin and Ether. Meanwhile, Hashdex’s Crypto Index ETF will track Bitcoin and Ether, as reflected in the Nasdaq Crypto US Settlement Price Index.
The approvals were granted after amended filings. Both firms’ trust structures and operational terms closely resemble those of previously approved spot Bitcoin and Ether ETP proposals under earlier SEC rulings.
According to the agency, the proposals met the criteria set forth in the Exchange Act. This legislation requires issuers to establish rules that prevent fraud and manipulation while safeguarding investors and the public interest.
In August, Franklin Templeton applied to the SEC for approval of its crypto index ETF, but the decision was delayed on November 20. Meanwhile, asset manager Hashdex submitted its second amended ETF application on November 25. This was preceded by an initial amendment in October after the SEC requested additional time to review the proposal.
Hashdex previously announced that its multi-asset ETF will initially concentrate on Bitcoin and Ethereum, with potential plans to expand by adding Solana and Cardano in the future. By diversifying the ETF’s holdings across multiple major digital assets, the firm aims to reduce the volatility typically linked to single-asset ETFs.
ETFs have gained significant popularity in recent years as they offer a straightforward and regulated method for investors to diversify their portfolios across various assets.
In a post on X, Nate Geraci, president of The ETF Store, an investment advisory firm specializing in ETFs, suggested that the SEC’s approval could prompt other firms to follow suit.
“[It] will be interesting to see if BlackRock or others attempt to piggyback on this & launch similar ETFs,” Geraci wrote.
Analysts Predict ETFs’ Debut
Eric Balchunas, a senior ETF analyst at Bloomberg, recently forecasted that both funds could launch in January. He noted that these ETFs are market-cap weighted, with approximately 80% of the allocation in Bitcoin and 20% in Ethereum.
Balchunas and fellow Bloomberg ETF analyst James Seyffart predict that ETFs tracking other cryptocurrencies, such as Litecoin or Hedera, may soon follow the approval of the Bitcoin and Ether funds.
Litecoin is considered a strong candidate for ETF approval due to its origins as a Bitcoin fork, which could classify it as a “commodity.” Meanwhile, Hedera has not been classified as a security by the SEC, potentially simplifying its path to approval compared to other cryptocurrencies facing regulatory challenges.
Read More
- SEC Reportedly Rejects Solana ETF Applications, Stalling Crypto’s ETF Expansion
- Bitwise Files for Bitcoin-Ethereum ETF With SEC, Plans NYSE Launch
- WisdomTree Files for XRP ETF in Delaware
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
