Table of Contents
The U.S. Securities and Exchange Commission (SEC) has granted approval for two crypto index exchange-traded funds (ETFs) from Hashdex and Franklin Templeton, marking a significant step in the evolution of regulated crypto investment products.
The Hashdex Nasdaq Crypto Index US ETF and the Franklin Templeton Crypto Index ETF, both featuring a combined exposure to Bitcoin and Ethereum, received the green light following amendments to their respective filings. The Hashdex ETF, filed through Nasdaq, will maintain an 80/20 Bitcoin-to-Ethereum weighting with room for future asset additions. Similarly, Franklin Templeton’s ETF, listed through Cboe BZX, adheres to commodity-based trust share standards, enabling swift regulatory approval.
The introduction of regulated crypto index ETFs could pave the way for increased institutional participation and mainstream adoption. By offering exposure to Bitcoin and Ethereum within a diversified product, these ETFs reduce barriers to entry and provide a more accessible framework for portfolio diversification.
These ETFs are expected to launch as early as January, offering investors simplified access to digital assets within traditional brokerage accounts. Bloomberg senior ETF analyst Eric Balchunas views this development as a precursor to a broader wave of crypto ETFs, potentially including products centered on Litecoin, HBAR, XRP, and Solana in the coming years.
We expect a wave of cryptocurrency ETFs next year, albeit not all at once. First out is likely the btc + eth combo ETFs, then prob Litecoin (bc its fork of btc = commodity), then HBAR (bc not labeled security) and then XRP/Solana (which have been labeled securities in pending… pic.twitter.com/29vMdciZxE
— Eric Balchunas (@EricBalchunas) December 17, 2024
Changing Regulatory Landscape
The SEC's approval comes amid shifting political and regulatory dynamics. The anticipated inauguration of a new administration, coupled with SEC chair Gary Gensler’s planned departure, has fueled optimism within the crypto industry. President-elect Donald Trump’s nominee for SEC chair, Paul Atkins, is known for his pro-crypto stance, suggesting a potential easing of restrictions on digital asset products.
The approval also highlights the SEC’s changing relationship with the crypto sector, which had previously faced resistance during Gensler’s tenure. Observers expect the new leadership to accelerate approvals for additional crypto ETFs, especially for assets not classified as securities.
