After several extensive reviews since June of this year, the Securities and Exchange Commission (SEC) has finally approved the first exchange-traded spot funds that combine Bitcoin and Ethereum.

The agency has authorized Nasdaq to list the Hashdex Nasdaq Crypto Index US ETF and Cboe BZX Exchange to list the Franklin Crypto Index ETF, a report said submission published on Thursday.

“The portion of Bitcoin and Ether held by each trust is based on the market capitalization of the free float,” the filing said.

Eric Balchunas, senior ETF analyst at Bloomberg expected The funds will launch in January with a split of approximately 80% Bitcoin and 20% Ethereum, reflecting current market capitalization.

Funds must meet continuous listing requirements and maintain transparency about portfolio holdings and pricing. Both exchanges monitor compliance and may initiate delisting procedures if requirements are not met.

Trading in ETF shares is subject to the existing stock valuation regulations on both stock exchanges. The Funds will release intraday benchmarks every 15 seconds during regular trading hours.

The approval comes as significant activity continues in existing crypto ETF markets. When it comes to current Bitcoin products, BlackRock’s IBIT dominates with $56 billion in assets under management (AUM) and over $4.4 billion in volume.

BlackRock’s ETF is followed by Fidelity (FBTC) and Grayscale (GBTC), both of which are close together with an AUM of around $20 billion each.

Current Data from Coinglass shows significant outflows across large funds on December 19, with negative net moves of around $671 million.

Make yourself comfortable

In August, the SEC said that a longer period for verification Wednesday’s ETFs were required to allow “adequate time to review the proposed rule change and the issues raised therein.”

Franklin Templeton’s application received “expedited approval” due to its similarity to previously approved spot crypto exchange-traded products (ETPs). The SEC also noted that it continues to have high market correlations with CME futures.

One of the main factors the SEC considered in this filing is surveillance data sharing. This facility is an agreement between exchanges to exchange trading data and essential market information to detect and prevent fraud and manipulation in associated markets.

The hybrid Bitcoin-Ethereum ETF demonstrated this with “a regulated market of significant size,” the SEC said, explaining how this new financial product complies with established commodity-based trust standards.

The approval suggests that the SEC is comfortable with a dual-asset framework as long as it meets its standards and is sufficiently correlated with established markets. Until now, spot crypto ETFs have been limited to exposure to individual assets.

“Advisors love diversification, especially in an emerging asset class like crypto,” said Nate Geraci, president of the ETF Store, discusses the approval in a thread on X. “I expect there will be significant demand for these products.”

Geraci also noted that it would be “interesting” to see if other crypto ETF issuers follow suit and launch similar products.

The SEC did not immediately respond to a request for comment.

Edited by Sebastian Sinclair