Franklin Templeton has taken a significant step to enhance its presence in the cryptocurrency exchange-traded fund (ETF) market by filing an application for a new product, the Franklin Crypto Index ETF. This ETF is designed to track a digital currency index, offering investors broader exposure to the rapidly evolving crypto space.
ETF to Track Leading Digital Assets
As detailed in the Aug. 16 filing with the Securities and Exchange Commission (SEC), the Franklin Crypto Index ETF will trade under the ticker symbol EZPZ. The fund will track the CF Institutional Digital Asset Index–US–Settlement Price, which includes leading cryptocurrencies such as Bitcoin and Ethereum.
Nate Geraci, president of The ETF Store in Overland Park, Kansas, emphasized the inevitability of such an ETF. “Spot Bitcoin and Ethereum ETFs were simply the first steps down a long path towards index-based and actively managed crypto ETFs,” Geraci noted. He highlighted the tremendous success of spot Bitcoin ETFs, which have become some of the most successful launches in the industry’s history.
This filing comes amid growing interest and demand for cryptocurrency-based investments. Earlier this year, the SEC approved ETFs based on the spot prices of Bitcoin and Ethereum, both of which have attracted billions of dollars in assets.
Franklin Templeton’s Growing Digital Asset Portfolio
Franklin Templeton, one of the leading asset management firms, already offers the Franklin Bitcoin ETF (EZBC), which has accumulated $390 million in assets since its launch on Jan. 11. Additionally, the firm introduced the Franklin Ethereum ETF (EZET) on July 23, which currently manages $31 million in assets.
David Mann, Franklin Templeton’s head of ETF Product & Capital Markets, stated in an emailed response that the firm could not comment on the new ETF during the filing period. However, Mann expressed optimism about the firm’s growth in the digital asset sector, noting that the Franklin Bitcoin ETF has been one of the company’s fastest-growing products. He also observed that the Franklin Ethereum ETF has been performing well in terms of asset flows, suggesting strong investor interest in these products.
Incentives for Creating More Crypto-Based Funds
The filing indicates that Franklin Templeton plans to replicate the index tracked by EZPZ fully. If the underlying index adds more cryptocurrencies, the firm will update its filing accordingly.
Geraci commented on the broader implications of the success of spot Bitcoin and Ethereum ETFs, suggesting that it has incentivized issuers to develop new products. “The natural evolution of single spot crypto ETFs is multi-asset products,” he said. Geraci also noted that the emerging nature of digital assets might encourage financial advisors to adopt a diversified approach, making a basket of crypto assets more appealing to investors than selecting individual ones.
Franklin Templeton’s move to introduce a crypto index ETF reflects the growing demand for diversified crypto investment products, as the industry continues to evolve rapidly.
