SEC simultaneously approves Hashdex, Franklin’s Bitcoin-Ether ETFs

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).

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In a Dec. 19 notice, the SEC approved Hashdex’s Nasdaq Crypto Index US ETF, which will trade on the Nasdaq stock market. At the same time, the regulator approved the separate Franklin Crypto Index ETF, which is destined for the Cboe BZX Exchange.

Both indexes will hold spot Bitcoin (BTC) and spot Ether (ETH). The Franklin Crypto Index ETF tracks the Institutional Digital Asset Index, a benchmark designed to represent the performance of digital assets such as Bitcoin and Ether, and Hashdex’s Crypto Index ETF will track Bitcoin and Ether, which are included in the Nasdaq Crypto US Settlement Price Index.

The SEC said Franklin Templeton’s updated Dec. 18 filing was approved on an “accelerated basis.”

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Both approvals were based on the amended filings, the Trusts’ structure 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.

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The commission also said 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.

Nate Geraci, president of The ETF Store, an investment adviser specializing in ETFs, speculated in a Dec. 19 post to X that the SEC’s approval could 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,” Geraci added.

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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, after filing its first amended S-1 in October after the SEC asked for more time to decide whether to authorize the proposal.

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. 

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