In response to yesterday's downturn in the virtual currency market, the U.S. Securities and Exchange Commission (SEC) approved The first Bitcoin (BTC) and Ethereum (ETH) dual index exchange traded fund (ETF) from Franklin Templeton and HashDex. The ETF is scheduled to launch in January 2025.
SEC approves first Bitcoin and Ethereum dual-index ETF
For the first time, US financial regulators have approved a hybrid Bitcoin and Ethereum index ETF. The Hashdex Crypto Index ETF will trade on the Nasdaq, and the Franklin Templeton Crypto Index ETF will be listed on the CBOE BZX exchange.
Both ETFs hold spot BTC and ETH in a ratio that reflects their respective market capitalizations, with an 80:20 ratio currently favoring Bitcoin. However, pending regulatory approval, the ETF could be expanded to include other cryptocurrencies in the future.
The SEC emphasized that Franklin Templeton's December 18 filing was approved quickly. Commenting on the development, Nate Geraci, President of ETF Store, said: said:
It will be interesting to see whether BlackRock and others take advantage of this and try to launch a similar ETF. Either way, we expect these products to be in great demand. Advisors love diversification. Especially in emerging asset classes such as cryptocurrencies.
Mr. Geraci highlighted the potential rationale behind the SEC's decision to approve a cryptocurrency index ETF, stating that in terms of trust structure and operating conditions, it compares favorably with the previously approved Spot Bitcoin ETF and Spot Bitcoin ETF. He pointed out the similarities with the Ethereum ETF.
The SEC added that both ETF proposals are consistent with standards set by the Securities and Exchange Act. For the uninitiated, securities laws require issuers to have safeguards against fraud, manipulation, and risks to investors.
Crypto Index ETF Details
Asset manager Hasidex first amended its S-1 filing with the SEC in October and filed a second amended application on November 25th. Franklin Templeton filed for an S-1 cryptocurrency index ETF in August.
In Hashdex's November filing, the company said other digital assets such as Avalanche (AVAX), Chainlink (LINK), and Litecoin (LTC) may meet eligibility criteria and receive regulatory approval. He stated that it may be added to the ETF in the future. Franklin Templeton's ETF also has room to add other cryptocurrencies, but they are not named.
In particular, Hashdex ETFs rely on custodial services from Coinbase, BitGo, Fidelity, and Gemini. Similarly, Franklin Templeton's ETF uses BitGo and Coinbase as primary custodians.
The crypto ETF industry has become increasingly competitive thanks to its huge success since its inception. launch At the beginning of this year. expert opinion A U.S.-based crypto spot ETF could soon overtake a gold spot ETF in terms of net asset holdings.
Following the United States, countries around the world are also steadily growing warming up The idea of a regulated crypto ETF. At the time of writing, BTC is trading at $95,824, down 4.8% in the past 24 hours.
Featured image from Unsplash.com, chart from TradingView.com
