The United States Securities and Exchange Commission (SEC) has approved two spot cryptocurrency index exchange-traded funds (ETFs), marking a significant milestone in the digital asset market.

SEC Approves Franklin Templeton and Hashdex ETF Proposals

On December 18, the SEC granted “accelerated approval” to Franklin Templeton’s crypto index ETF proposal, allowing it to trade on the Cboe BZX Exchange. The following day, the commission approved Hashdex’s crypto index ETF, which is set to trade on the Nasdaq stock market.

Crypto index ETFs track the performance of multiple cryptocurrencies, offering investors diversified exposure to the digital asset market through a single investment vehicle. They replicate the performance of an underlying index by holding the same assets in similar proportions.

Key Features of the Approved ETFs

Hashdex’s Crypto Index ETF will track the Nasdaq Crypto US Settlement Price Index, while Franklin Templeton’s product mimics the performance of the Institutional Digital Asset Index. Both indices primarily focus on spot Bitcoin and Ether.

The SEC had previously requested more time to evaluate both proposals, citing the need for a thorough assessment. Hashdex and Franklin Templeton addressed these concerns by submitting revised filings, which the commission deemed consistent with regulatory requirements designed to prevent fraud and manipulation, protect investors, and ensure the integrity of the market.

Experts believe more issuers will follow suit, anticipating “meaningful demand” for such products as advisors seek diversification.

Market Expectations and Future Developments

According to Bloomberg analyst Eric Balchunas, the funds are “likely” to go live in January, with Bitcoin making up about 80% and Ether 20% of the holdings. ETF Store President Nate Geraci believes that more issuers will follow suit, anticipating “meaningful demand” for such products as advisors seek diversification.

Bitwise has also filed a proposal with the SEC to launch a spot Bitcoin and Ether exchange-traded product (ETP) on the NYSE Arca. The fund aims to provide investors with balanced exposure to the two largest crypto assets in an accessible format.

Tips for Investors

  • Consider diversifying your investment portfolio with a crypto index ETF to gain exposure to multiple digital assets.
  • Keep an eye on upcoming developments in the crypto market and regulatory changes.
  • Research and understand the underlying index and assets held by the ETF.

Stay up-to-date with the latest news and developments in the crypto market by following Global Crypto News.

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