US SEC Approves Franklin Templeton and Hashdex Bitcoin, Ethereum ETFs

The United States Securities and Exchange Commission (SEC) has approved cryptocurrency ETFs from Franklin Templeton and Hashdex, signaling a significant step toward integrating Bitcoin and Ethereum into traditional financial markets. Franklin Templeton’s ETF will trade on the Cboe BZX Exchange, and Hashdex’s ETF will launch on the Nasdaq. Both products focus on spot Bitcoin and Ether, providing diversified exposure to the digital asset market through regulated investment vehicles. These approvals follow extensive revisions to meet SEC requirements, with Franklin’s proposal granted “accelerated approval” due to its similarity to previously approved ETFs.

Dual Bitcoin and Ethereum ETFs to Be Listed on Nasdaq and Cboe BZX

The Hashdex Nasdaq Crypto Index US ETF and Franklin Templeton Crypto Index ETF received the green light from the SEC to trade in the public market. These ETFs will be available for trading on the Nasdaq and the Cboe BZX exchanges, allowing investors to directly trade in Bitcoin and Ethereum spot. All the two funds will own Bitcoin, Ethereum, cash, and cash equivalents as part of their structure.

By permitting these ETFs, the SEC ensures crypto investments comply with key laws. These include the Securities Exchange Act of 1934 and the Investment Company Act of 1940.

SEC has *approved* both the Hashdex Nasdaq Crypto Index US ETF & Franklin Crypto Index ETF…

Will initially hold both btc & eth. pic.twitter.com/5GUhhhXL7y

— Nate Geraci (@NateGeraci) December 19, 2024

The approval process also contained measures for market surveillance in order to prevent fraud and manipulation. The decision will help digital assets to have a better standing and acceptance in the financial system.

Market Turbulence Surrounds SEC Decision

The US SEC’s decision is made at the time of high volatility of cryptocurrency markets. However, Bitcoin price declined significantly and was trading at slightly above $96,000, having previously traded at above $108,000 earlier in the week. Ethereum also went down by 15% and was trading at $3,440.

CoinGlass data shows that traders liquidated more than $1 billion worth of crypto in the last 24 hours. However, experts believe these ETFs will stabilize the crypto market and attract more institutional investors.

“This move created a clear, legally compliant way for investors to get involved with digital assets,” said a market analyst.

ETFs Bring Enhanced Oversight and Transparency

The ETFs aim to replicate market capitalization-weighted indexes of Bitcoin and Ethereum, allowing investors to invest in both without directly owning the coins. The Nasdaq Crypto Index will guide the Hashdex ETF, while Franklin Templeton’s fund will follow the CF Institutional Digital Asset Index.

In a bid to counter allegations of market manipulation, the US SEC noted that the price movements in the Bitcoin and Ethereum spot markets are in tandem with their respective futures markets. This correlation makes it easy to have supervision through sharing of surveillance data. To assess the price integrity, the SEC has used information from the CME’s Bitcoin and Ethereum futures markets.

Both funds avoid staking or income generation from airdrops in their spot-based investment strategies. These measures aim to safeguard investors’ interests and improve ETF transparency.

Future Prospects for Crypto ETFs

This approval could pave the way for additional cryptocurrency ETFs in the United States. Bloomberg analysts predict Litecoin ETFs could be next, given its classification as a commodity and its close relationship with Bitcoin.

However, other digital assets, such as Solana and XRP, face greater regulatory scrutiny.

The US SEC’s approval of these ETFs reflects a cautious but constructive approach to cryptocurrency regulation. By aligning these products with existing financial laws, the SEC is enabling safer participation in the digital asset market. This decision could encourage more institutional and retail investors to explore cryptocurrency as part of a diversified portfolio.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.