Franklin Templeton, Managing $1.5 Trillion, Files for U.S. Bitcoin ETF

To bolster Bitcoin’s acceptance in institutional finance, global investment giant Franklin Templeton took a significant step by submitting a regulatory Form S-1 to the U.S. Securities and Exchange Commission (SEC) on Monday. They seek approval to launch a Bitcoin ETF.

While several investment firms have recently submitted similar applications, they have yet to secure SEC approval.

Franklin Templeton, a prominent $1.5 trillion asset manager, joins the growing list of firms seeking a Bitcoin ETF. Their intention was revealed in their recent SEC submission.

The filing outlines the Franklin Templeton Digital Asset Trust’s establishment, designed to track Bitcoin’s performance.

The Franklin Bitcoin ETF, the proposed fund, aims to hold Bitcoin predominantly in its portfolio. For secure custody, Franklin Templeton partnered with Coinbase Custody Trust Company.

The Fund’s Structure and Custody Arrangement

The Franklin Bitcoin ETF operates as a “series” within the Franklin Templeton Digital Holdings Trust, aiming to replicate Bitcoin’s price performance. Importantly, its shares are backed by Bitcoin assets held by Coinbase Custody Trust Company.

Franklin Templeton’s announcement follows Grayscale Investments’ legal victory against the SEC. Where the DC Circuit Court of Appeals criticized the SEC’s rejection of Grayscale’s Bitcoin Trust (GBTC) ETF conversion as “arbitrary and capricious.”

This court ruling has boosted hopes for Bitcoin ETF approval. Bloomberg Intelligence analysts now estimate a 75% likelihood of approval by the end of 2023, up from the previous 65% estimate.

In their submission, Franklin Templeton emphasized the benefits of a Bitcoin ETF, highlighting improved liquidity and easier trading for investors. This approach particularly appeals to conservative investors cautious about navigating Bitcoin custody and security complexities.

SEC May Approve ETF Applications

In the realm of ETFs, several major institutional firms, such as BlackRock and Fidelity, have submitted applications for Bitcoin ETFs. Furthermore, ARK and 21Shares have unveiled their plans to introduce an Ethereum-focused Exchange-Traded Fund (ETF). They are targeting the cryptocurrency with the second-highest market capitalization.

Emulating the path set by financial behemoths like BlackRock, Franklin Templeton is optimistic that the SEC may soon grant approval for a spot Bitcoin ETF. This regulatory development could offer retail investors a seamless means to engage with Bitcoin’s price movements, seamlessly integrating it into their existing brokerage accounts alongside traditional assets like stocks and bonds.