The U.S. Securities and Exchange Commission (SEC) has approved new spot-based ETFs for Bitcoin and Ethereum, presented by Hashdex and Franklin Templeton, aimed at institutional investors.
The Approved ETFs and Their Features
The SEC approved rule changes proposed by Nasdaq and Cboe BZX, allowing the listing and trading of these ETFs. The funds meet Exchange Act criteria, requiring measures to prevent fraud and protect investors. The Franklin Templeton Crypto Index ETF tracks the Institutional Digital Asset Index, including Bitcoin and Ethereum, while the Hashdex Nasdaq Crypto Index US ETF is linked to the Nasdaq Crypto US Settlement Price Index, also focused on Bitcoin and Ethereum. Both funds prioritize transparency, regulatory compliance, and investor protection. Hashdex plans to extend to other digital assets, such as XRP, in the future.
Industry Reactions
Popular ETF analyst Eric Balchunas noted that both ETFs are market cap-weighted, likely allocating around 80% to Bitcoin and 20% to Ethereum. Nate Geraci, president of The ETF Store, speculated that other companies like BlackRock might follow, stating that financial advisors eagerly anticipate such products to diversify portfolios. On social media, artist Chad Steingraber highlighted the potential inclusion of XRP in the Hashdex ETF, sparking interest among crypto enthusiasts.
Conclusion
The approval of Bitcoin and Ethereum ETFs elevates the institutional credibility of cryptocurrencies in the market, allowing traditional investors to safely diversify portfolios without directly handling volatile digital assets. This approach opens new avenues for financial advisors and their clients interested in cryptocurrencies.
The entry of SEC-approved Bitcoin and Ethereum ETFs into the market marks a significant development in the digital asset sector, offering more structured and regulated paths for investors.