- Latecomer Franklin Templeton enters the competitive spot crypto ETF arena.
- To date, Franklin Templeton competes with seven other firms, including BlackRock and Fidelity in the race for Ethereum ETF approval.
- The move is aligned with Thiel’s stance in favor of cryptocurrencies.
Franklin Templeton has thrown its hat into the ring of cryptocurrency Exchange Traded Funds (ETFs) by officially filing for a spot Ethereum ETF, marking its entry into the increasingly competitive crypto market. The move comes shortly after the U.S. Securities and Exchange Commission’s (SEC) approval of 11 spot Bitcoin ETFs in January 2024, a decision that marked a significant milestone for the cryptocurrency industry after years of regulatory hurdles.
A spot crypto ETF, such as the one Franklin Templeton is pursuing, tracks the real-time market price of the underlying digital asset, providing investors with exposure to the token without requiring them to directly purchase it. The surge in demand for such investment products reflects the growing interest in cryptocurrencies among traditional investors seeking diversified portfolios.
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ETF Latecomer Franklin Templeton Faces Tight Competition
Franklin Templeton’s decision to enter the Ethereum ETF race puts it in competition with seven other providers vying to introduce similar products to the market. Notably, both BlackRock and Fidelity, key players in the space, have seen substantial asset growth in their spot Bitcoin ETFs, with assets totaling $4.18 billion and $3.49 billion, respectively. However, Franklin Templeton currently lags behind, with assets in its Bitcoin ETF totaling only $77 million, according to data from BitMEX Research.
Undeterred by its current position, the veteran asset management firm, established in 1947, remains committed to marketing its spot Bitcoin ETF, including through Google ads. This determination underscores Franklin Templeton’s belief in the potential of cryptocurrency ETFs to attract investors and diversify their portfolios.
Meanwhile, the SEC’s recent decision to delay its ruling on Grayscale Investments’ application to convert its Ethereum trust product into a spot ETF, along with BlackRock’s delayed application, highlights the regulatory challenges still facing the industry. VanEck, the first to file for a spot Ethereum ETF, awaits the SEC’s decision by May 23.
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Coinbase Custody to Serve as Franklin Templeton ETF’s Custodian
Coinbase Custody, a unit of leading crypto exchange Coinbase, is slated to hold the proposed ETF’s Ether in custody, a role it also holds for BlackRock’s Ethereum ETF. This partnership underscores the growing integration of traditional financial infrastructure with the cryptocurrency ecosystem.
As the competition heats up and regulatory hurdles persist, the race to launch Ethereum ETFs reflects the growing mainstream acceptance and adoption of cryptocurrencies as legitimate investment assets. Franklin Templeton’s entry into this arena further underscores the evolving landscape of financial markets in the digital age.
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