Hashdex and Franklin receive simultaneous SEC approval for Bitcoin & Ether ETFs
The New York Stock Exchange (NYSE) Arca has demonstrated its interest in listing a Grayscale crypto index exchange-traded fund (ETF) that includes a diverse portfolio of spot cryptocurrencies.
However, despite its efforts, the ETF has yet to receive approval from the United States Securities and Exchange Commission (SEC). This development highlights the ongoing regulatory scrutiny surrounding crypto-based financial products.
In contrast, the SEC has taken a significant step forward by approving Bitcoin and Ether index ETFs from Hashdex and Franklin Templeton, marking a major milestone for the cryptocurrency industry.
In an official notice issued on Dec. 19, the SEC announced its approval of Hashdex’s Nasdaq Crypto Index US ETF, which will be listed on the Nasdaq stock market. Simultaneously, the regulatory body greenlit Franklin Templeton’s Crypto Index ETF, slated for trading on the Cboe BZX Exchange.
This dual approval underscores the growing interest and acceptance of crypto-based financial instruments in mainstream markets.
Both ETFs are designed to include spot Bitcoin (BTC) and spot Ether (ETH). Franklin Templeton’s Crypto Index ETF is set to track the Institutional Digital Asset Index, a benchmark that reflects the performance of major digital assets, including Bitcoin and Ether.
On the other hand, Hashdex’s ETF will follow the Nasdaq Crypto US Settlement Price Index, which similarly focuses on tracking the performance of Bitcoin and Ether.
The SEC emphasized that these ETF proposals met the criteria outlined in the Exchange Act. These criteria require issuers to establish robust mechanisms to prevent fraudulent and manipulative practices, while also safeguarding investors and promoting the public interest.
Such measures are crucial in ensuring the integrity and reliability of financial products tied to the volatile and emerging cryptocurrency market.
Nate Geraci, president of The ETF Store, an advisory firm specializing in ETFs, commented on the SEC’s decision in a Dec. 19 post on X (formerly Twitter). Geraci speculated that this approval might inspire other prominent asset managers to follow suit.
“It will be interesting to see if BlackRock or others attempt to piggyback on this and launch similar ETFs,” he remarked. Geraci further noted that there is likely to be considerable demand for these new financial products, as financial advisors tend to value diversification, especially when dealing with an emerging asset class like cryptocurrencies.
Franklin Templeton initially submitted its application for a crypto index ETF in August, only to face a delay in the SEC’s decision on Nov. 20. Similarly, Hashdex submitted an amended ETF application on Nov. 25, revising its earlier filing from October after the SEC requested more time to review the proposal.
These developments highlight the complexities of gaining regulatory approval in the United States for crypto-related financial products.
Notably, Franklin Templeton and Hashdex are not the only firms aiming to introduce crypto index ETFs in the U.S. market.
On Nov. 26, NYSE Arca submitted a request to list a Bitwise ETF, which would include both Bitcoin and Ether. Additionally, in October, the exchange had proposed listing a Grayscale crypto index ETF comprising a broader range of spot cryptocurrencies.
By November, U.S. regulators confirmed that the Grayscale proposal was still under consideration, reflecting the growing number of crypto-focused ETF applications awaiting a regulatory decision.
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