The US Securities and Exchange Commission (SEC) recently announced a delay in its decision on Franklin Templeton’s application to launch a crypto index exchange-traded fund (ETF) offering exposure to Bitcoin (BTC) and Ethereum (ETH). The new deadline for the decision has been pushed back to Jan. 6, 2025. Originally, the SEC had a 45-day deadline to decide, which was supposed to fall on Nov. 22. However, the SEC has the authority to extend this period up to 90 days if necessary to evaluate the rule change and associated issues under Section 19(b)(2) of the Securities Exchange Act of 1934.
If approved, the Franklin Crypto Index ETF, which was filed on Aug. 17, would trade on the Cboe BZX Exchange under the Franklin Crypto Trust with the ticker EZPZ. The flourishing ETF ecosystem in the crypto market is evident with various asset managers seeking to launch their own crypto index ETFs. For example, Brazilian asset manager Hashdex filed to launch its own crypto index ETF in June, called the Hashdex Nasdaq Crypto Index US ETF, which would track BTC and ETH. Additionally, asset managers in the US are also seeking approval for ETFs tracking other cryptocurrencies such as XRP, Solana (SOL), Hedera (HBAR), and Litecoin (LTC).
The recent victory of President Donald Trump in the US elections has led to heightened market optimism, with many firms expecting a favorable regulatory environment for the industry in the coming months. VanEck, for example, stated that its Solana ETF was a “bet” on Trump’s reelection and anticipates the application to be approved under his administration. Moreover, US regulators have recently granted final approvals to launch options trading for spot Bitcoin ETFs, including BlackRock’s IBIT, Bitwise’s BITB, and Grayscale’s GBTC. On the first day of trading, IBIT options recorded nearly $2 billion in trading volume, with analysts noting the remarkable numbers.
Overall, the delay in the SEC’s decision on Franklin Templeton’s crypto Index ETF to 2025 reflects the growing interest and development in the crypto ETF market. With various asset managers seeking approval for their own crypto index ETFs and the anticipation of a favorable regulatory environment under the new administration, the industry is poised for growth and innovation. The approval and launch of these ETFs could further legitimize the cryptocurrency market and provide investors with more diverse investment opportunities in the digital asset space. Investors and industry participants should continue to monitor developments in the crypto ETF market for potential opportunities and growth in the future.
