The U.S. Securities and Exchange Commission (SEC) has approved Bitcoin and Ethereum ETFs offered by Hashdex and Franklin Templeton. These investment vehicles are designed to provide institutional access to the two largest digital assets.
Approval and Features of the ETFs
The SEC approved rule changes proposed by Nasdaq and Cboe BZX, allowing the listing and trading of these ETFs. The commission emphasized that the funds meet Exchange Act criteria, requiring measures to prevent fraud and protect investors. The approved funds include: Hashdex Nasdaq Crypto Index US ETF and Franklin Templeton Crypto Index ETF. Franklin Templeton’s ETF tracks the Institutional Digital Asset Index, which reflects the performance of Bitcoin and Ethereum, while Hashdex’s ETF is tied to the Nasdaq Crypto US Settlement Price Index. Both funds prioritize transparency, regulatory compliance, and investor protection.
Industry Reaction to New ETFs
Popular ETF analyst Eric Balchunas noted that both ETFs are market cap-weighted, likely allocating around 80% to Bitcoin and 20% to Ethereum, expecting the launch to occur in January. Nate Geraci, president of The ETF Store, speculated that other firms, including BlackRock, might follow suit, commenting that there will be meaningful demand for these products as advisors love diversification.
Potential Impact on the Market
Approval of Bitcoin and Ethereum ETFs brings institutional credibility to the crypto market, allowing traditional investors to diversify portfolios without directly holding volatile digital assets. This change is crucial for financial advisors seeking regulated, transparent options for clients interested in cryptocurrencies. On social media, artist Chad Steingraber highlighted the potential inclusion of XRP in the Hashdex ETF, sparking interest among crypto enthusiasts.
The SEC's approval of these ETFs may significantly impact the cryptocurrency market by enhancing accessibility and trust among institutional investors, opening new opportunities for diversification and attracting new market participants.
