In a significant development for the cryptocurrency space, the United States Securities and Exchange Commission (SEC) has given the green light to Hashdex and Franklin Templeton’s respective Bitcoin and Ether index exchange-traded funds (ETFs).
Key Takeaways:
- The SEC approved Hashdex’s Nasdaq Crypto Index US ETF, which will trade on the Nasdaq stock market.
- The regulator also gave approval for the Franklin Crypto Index ETF, destined for the Cboe BZX Exchange.
- Both indexes will hold spot Bitcoin (BTC) and spot Ether (ETH).
- The SEC has given approval for Hashdex and Franklin Templeton to list and trade shares of their crypto index ETFs.
SEC’s Rationale
The SEC said that both approvals were based on the amended filings, the trusts’ structures, and the operation terms from both firms being "substantially similar" to spot Bitcoin ETP and spot Ether ETP proposals already approved under previous SEC orders. The commission also stated that the proposals met the criteria of the Exchange Act, which requires issuers to have rules in place to prevent fraudulent and manipulative acts and protect investors and the public interest, among other requirements.
Market Reaction
Nate Geraci, president of The ETF Store, an investment adviser specializing in ETFs, speculated in a post to X that the SEC’s approval may inspire other firms to copy the move. "Will be interesting to see if BlackRock or others attempt to piggyback on this & launch similar ETFs," he said. "Regardless, I expect there will be meaningful demand for these products. Advisers LOVE diversification. Especially in an emerging asset class such as crypto."
Background
In August, Franklin Templeton applied to the SEC for approval of its crypto index ETF, but the regulatory agency delayed the decision on Nov. 20. Asset manager Hashdex submitted its second amended application for an ETF on Nov. 25. It filed its first amended S-1 in October after the SEC asked for more time to decide whether to authorize the proposal.
Other Firms’ Efforts
Franklin Templeton and Hashdex were not the only firms looking to launch a crypto index ETF in the United States this year. On Nov. 26, the securities exchange NYSE Arca requested to list a Bitwise ETF holding both Bitcoin and Ether. In October, NYSE Arca also expressed interest in listing a Grayscale crypto index ETF holding a diverse basket of spot crypto. In November, US regulators indicated they were considering the listing for approval.
Implications
The SEC’s approval of Hashdex and Franklin Templeton’s crypto index ETFs may have significant implications for the cryptocurrency space. The creation of these ETFs may provide investors with a more convenient way to gain exposure to Bitcoin and Ether, potentially increasing demand and driving up prices. Additionally, the approval may inspire other firms to launch similar products, further expanding access to cryptocurrency investments.
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The Future of Cryptocurrency Investing
The approval of Hashdex and Franklin Templeton’s crypto index ETFs marks a significant milestone for the cryptocurrency space. As investors increasingly seek to gain exposure to Bitcoin and Ether, the creation of these ETFs may provide a more convenient way to do so.
However, the implications of this development go beyond just market access. The approval may also have far-reaching consequences for the regulatory environment surrounding cryptocurrencies. As other firms look to launch similar products, the SEC will likely face increased pressure to provide clear guidelines and oversight for the industry.
In conclusion, the SEC’s approval of Hashdex and Franklin Templeton’s crypto index ETFs is a significant development for the cryptocurrency space. The creation of these ETFs may provide investors with a more convenient way to gain exposure to Bitcoin and Ether, potentially increasing demand and driving up prices. Additionally, the approval may inspire other firms to launch similar products, further expanding access to cryptocurrency investments.
Recommendations
- Investors seeking to gain exposure to cryptocurrencies should consider exploring index funds and ETFs as a potential investment option.
- The SEC’s approval of Hashdex and Franklin Templeton’s crypto index ETFs may have far-reaching implications for the regulatory environment surrounding cryptocurrencies.
- As other firms look to launch similar products, investors should remain vigilant and adapt to any changes in the market.
Key Takeaways
- The SEC approved Hashdex’s Nasdaq Crypto Index US ETF and Franklin Crypto Index ETF.
- Both indexes will hold spot Bitcoin (BTC) and spot Ether (ETH).
- The SEC has given approval for Hashdex and Franklin Templeton to list and trade shares of their crypto index ETFs.
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