The US SEC Approves Bitcoin and Ethereum ETFs from Franklin Templeton and Hashdex

The US Securities and Exchange Commission (SEC) has approved combined spot-based Bitcoin and Ethereum exchange-traded Funds (ETF) from Franklin Templeton

The US Securities and Exchange Commission (SEC) has approved two combined spot-based Bitcoin and Ethereum exchange-traded Funds (ETF) from global asset manager Franklin Templeton and Hashdex.

The approval, as highlighted in the report, will see Franklin Templeton trade on the Cboe BZX Exchange, while Hashdex will trade on the Nasdaq stock market. Nasdaq filed an updated proposal for the Hashdex crypto index ETF in September, following its initial filing in May. Meanwhile, Franklin Templeton has been working towards this ETF since it filed its proposal in August.

According to the filing, the proportions of Bitcoin (BTC) and Ethereum (ETH) held by each Trust will be determined based on free-float market capitalizations, allowing adjustments according to these cryptocurrencies’ liquidity and trading availability.

Franklin Templeton’s crypto index ETF has received “accelerated approval” from the SEC, aligning it with previously approved spot exchange-traded products (ETPs) that show strong correlations with CME futures, indicating their market viability.

The SEC also highlighted the significance of a surveillance-sharing agreement, which enables exchanges to share trading data and market information to combat fraud and manipulation. The Bitcoin-Ethereum ETF adheres to established standards for commodity-based investments and operates within a substantial regulated market.

This approval marks the SEC’s acceptance of diversified crypto ETFs, provided they meet regulatory standards and correlate well with traditional markets.

Implications for the Crypto Market

The funds are “likely” to go live in January, with Bitcoin making up about 80% and Ether 20% of the holdings, according to Bloomberg analyst Eric Balchunas.

Moreover, the approval validates the speculations made by Balchunas on Tuesday regarding a new wave of ETFs. He anticipated that Bitcoin and Ethereum ETFs would be approved first, followed by Litecoin (LTC) and HBAR ETFs.

Now that the first crypto index funds have been approved, experts expect that more issuers will follow suit. ETF Store President Nate Geraci anticipates that institutional investors will drive up demand for these products as they seek to diversify their portfolios.

However, other digital assets, such as Solana and XRP, are facing closer regulatory scrutiny. Overall, the SEC’s approval of these ETFs demonstrates a cautious yet progressive approach to regulating cryptocurrencies.

The approval comes amid high volatility in the cryptocurrency markets.

Over $1 billion in cryptocurrency was liquidated in the last 24 hours, according to CoinGlass data. Additionally, Bitcoin and Ethereum’s prices have dropped sharply, trading at around $93,000 and $3,200, respectively.

However, experts believe the introduction of these ETFs could help stabilize the market and attract more institutional investors.