Asset management firm Franklin Templeton has officially entered the race to spot an Ethereum Exchange-Traded Fund (ETF), becoming the eighth player in the market to seek approval for a similar product, Reuters reported.
This January, in a major development for the cryptocurrency industry, the US Securities and Exchange Commission (US SEC) approved 11-point Bitcoin ETFs in January. This marked a watershed moment, fulfilling a ten-year requirement for regulatory approval within the crypto space.
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Explained by Spot Crypto ETFs
A spot crypto ETF, like the approved spot Bitcoin ETFs, tracks the market price of the underlying digital asset. This provides investors with exposure to the token without requiring an outright purchase.
With Franklin Templeton’s registration, there are now eight ETF providers competing to introduce spot Ethereum ETFs, the report added. Notably, all of these contenders have brought out spot Bitcoin products in the same month.
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Active Differences between Major Players
While BlackRock and Fidelity, the main contenders in the Bitcoin ETF race, boast assets of $4.18 billion and $3.49 billion, respectively, Franklin Templeton is positioned near the bottom of the league table, the report said. According to data from BitMEX Research, assets in Franklin’s Bitcoin ETF total just $77 million, with seven of the nine recently launched spot Bitcoin ETFs holding assets exceeding $100 million.
Despite its current position, the veteran asset management firm, established in 1947, remains resilient. Franklin Templeton is actively marketing its spot Bitcoin ETF through Google ads, signaling its commitment to gaining traction in the market.
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Industry Developments and SEC Decisions
Recent SEC decisions have impacted other players in the crypto ETF race. The regulator delayed its ruling on Grayscale Investments’ application to convert its Ethereum trust product into a spot ETF. Similarly, BlackRock’s application for a similar product has met with delay. VanEck was the first to apply for a spot Ethereum ETF, and the SEC must decide on its approval or denial by May 23.
If approved, Coinbase Custody, a unit of cryptocurrency exchange Coinbase, will hold the proposed ETF’s Ethereum in custody. Notably, Coinbase Custody is also the proposed custodian for BlackRock’s Ethereum ETF.
(With inputs from Reuters)
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Published: 13 Feb 2024, 10:08 IST