SEC Approves First Dual Bitcoin and Ethereum Exchange-Traded Funds
The U.S. Securities and Exchange Commission (SEC) has approved the first dual Bitcoin and Ethereum Exchange-Traded Funds (ETFs) from Hashdex and Franklin Templeton, simplifying institutional access to these cryptocurrencies through spot-based investments.
The Franklin Templeton Crypto Index ETF and Hashdex Nasdaq Crypto Index US ETF received regulatory clearance. Franklin Templeton's filing was approved quickly due to its compliance with commodity-based trust standards, aided by rule changes from Nasdaq and Cboe BZX. Initially, the Hashdex ETF will focus on Bitcoin and Ethereum, with plans to potentially include other assets like XRP.
This approval comes after previous delays, as the SEC postponed decisions on Hashdex's June filing twice. Analysts suggest that upcoming leadership changes in Washington may have expedited these approvals. The ETFs are expected to launch in January 2024, with portfolios weighted approximately 80% Bitcoin and 20% Ethereum. ETF analyst Eric Balchunas noted the significance of this milestone for both companies.
Crypto markets remain volatile. Bitcoin's price recently fell over 8%, dropping from $105,000 to below $96,000, resulting in over $1 billion in liquidations within 24 hours. Despite this, the ETF approvals indicate increasing mainstream adoption and regulatory acceptance of digital assets.
Industry experts anticipate Litecoin ETFs could be next for approval. As a Bitcoin fork, Litecoin meets U.S. regulatory standards, making it a viable candidate for commodity classification, although institutional demand may be limited. Meanwhile, ETFs for Solana and XRP may experience further delays due to ongoing uncertainties.
The SEC’s stance toward crypto appears to be evolving. Recent leadership changes, including the non-renewal of Commissioner Caroline Crenshaw, suggest a potential easing of the agency's historically strict approach. Crenshaw, who supported SEC Chair Gary Gensler’s anti-crypto position, will leave in January. With Paul Atkins stepping into a leadership role, the SEC may adopt a more favorable perspective on crypto ETFs moving forward.
These developments indicate an increasing acceptance of cryptocurrency in traditional finance despite market fluctuations and ongoing regulatory challenges. The approval of dual Bitcoin and Ethereum ETFs may lead to further advancements in the crypto investment landscape.