SEC approves Hashdex and Franklin Templeton’s combined Bitcoin and Ethereum crypto index ETFs
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SEC approves Hashdex and Franklin Templeton’s combined Bitcoin and Ethereum crypto index ETFs

Posted on by Amelia Pressman

  • The SEC approved Hashdex’s proposal for a crypto index ETF.
  • The ETF currently includes Bitcoin and Ethereum, with possible additions in the future.
  • The agency also approved Franklin Templeton’s modification of his Cboe BZX to a crypto index ETF.

The US Securities and Exchange Commission (SEC) on Thursday approved asset managers Hashdex and Franklin Templeton’s application for a crypto index exchange-traded fund (ETF).

SEC greenlights crypto index ETFs Hashdex Nasdaq and Franklin Templeton Cboe

The SEC has approved combined spot-based Bitcoin and Ethereum exchange-traded funds (ETFs) from asset managers Hashdex and Franklin Templeton, according to a filing Thursday.

The approvals include the Hashdex Nasdaq Crypto Index US ETF and the Franklin Templeton Crypto Index ETF. The agency said that Nasdaq and Cboe BZX have proposed rule changes for listing and trading shares of the products.

The products will include both Bitcoin and Ethereum with an average weighting of 80/20, but have room for future additions.

Nasdaq filed an amended proposal for a Hashdex crypto index ETF in September after initially submitting it in May.

On the other hand, Franklin Templeton has been following this ETF since submitting his first proposal in September.

The updated filing, filed early Thursday by Cboe BZX, received expedited clearance because it complies with existing standards for commodity-based trust stocks.

The products are expected to hit the market in January, according to Bloomberg analyst Eric Balchunas.

The SEC’s approval shows the easing tension between the regulator and the crypto community ahead of Donald Trump’s inauguration in January.

Additionally, the approval confirms Balchunas’ Tuesday speculation about a new wave of ETFs. Balchunas predicted that a combination of Bitcoin and Ethereum ETFs would come first, followed by the approval of the Litecoin (LTC) and HBAR ETFs.

Frequently asked questions about crypto ETFs

An exchange traded fund (ETF) is an investment instrument or index that tracks the price of an underlying asset. ETFs can track not just a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks the price of Bitcoin. ETF is a tool that allows investors to gain exposure to a specific asset.

Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still awaiting regulatory approval. The SEC says the cryptocurrency industry is new and vulnerable to manipulation, which is why it has delayed crypto-related futures ETFs in recent years.

Yes. The SEC approved the listing and trading of several Bitcoin spot exchange-traded funds in January 2024, opening the door for institutional capital and mainstream investors to trade the premier cryptocurrency. The decision was hailed as groundbreaking by the industry.

The main advantage of crypto ETFs is the ability to gain exposure without owning a cryptocurrency, reducing the risk and cost of holding the asset. Other advantages include a shorter learning curve and greater security for investors, as ETFs take over the protection of the underlying asset holdings. The main disadvantage is that as an investor you cannot have direct ownership of the asset, or as they say in cryptocurrencies, “not your keys, not your coins”. Another disadvantage is higher costs associated with holding cryptocurrencies, as ETFs charge fees for active management. Although investing in ETFs reduces the risk of holding an asset, fluctuations in the price of the underlying cryptocurrency are also likely to be reflected in the investment vehicle.

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