• SEC approves Franklin Templeton and Hashdex Bitcoin, Ethereum ETFs for Nasdaq and Cboe BZX listings, boosting market access.
  • New ETFs focus on Bitcoin and Ethereum spot, excluding staking, ensuring transparency and regulatory compliance for investors.
  • Crypto ETFs offer institutional investors regulated exposure to Bitcoin and Ethereum, helping stabilize volatile crypto markets.

Franklin Templeton and Hashdex have a green light from the U.S. Securities and Exchange Commission (SEC) for two crypto ETFs. These ETFs which track Bitcoin and Ethereum will be traded on Cboe BZX Exchange and the Nasdaq. Both funds are intended to enable investor access to spot Bitcoin and Ethereum while emphasizing compliance and disclosure.

Bitcoin and Ethereum ETFs Receive SEC Approval

The decision allows the creation of the Franklin Templeton Crypto Index ETF as well as the Hashdex Nasdaq Crypto Index US ETF. These funds will enable investors to indirectly invest in Bitcoin and Ethereum, without holding an ownership stake in Bitcoin and Ethereum themselves. The ETFs will invest in Bitcoin, Ethereum, cash and cash equivalent products as well as other portfolio products. 

This approval is historically important for the cryptocurrency industry, as it fastens the connection between Bitcoin and Ethereum, and the traditional financial world. The decision follows a comprehensive review process, with both funds having undergone significant revisions to meet the SEC’s regulatory requirements. SEC granted Franklin Templeton’s proposal an “accelerated approval,” noting its similarity to previously approved ETFs. 

Market Oversight and Regulatory Safeguards

These two ETFs invest in companies regulated under the 1934 Securities Exchange Act and the Investment Company Act of 1940. It also shows that the SEC has a priority in market supervision with the relevant mechanisms for the identification of fraud or market manipulation. The spot prices of Bitcoin and Ethereum in other specific markets are moving in pair with their futures markets which makes them easier to monitor.

SEC has *approved* both the Hashdex Nasdaq Crypto Index US ETF Franklin Crypto Index ETF…

Will initially hold both btc eth. pic.twitter.com/5GUhhhXL7y

— Nate Geraci (@NateGeraci) December 19, 2024

The SEC’s approval also takes care of issues to do with market integrity. Thus, using data from CME Bitcoin and Ethereum futures markets, the SEC will be able to track changes in spot markets as well as increasing the total transparency of the considered assets.

Crypto ETFs: A Pathway for Institutional Investors

These new ETF s could well act as a starting point for institutional investors already considering direct exposure to the cryptocurrency market. According to market analysts, approval of such funds could help to bring order to the frequently unstable cryptocurrency market. After that decision, the cryptocurrency market was somewhat volatile, and both Bitcoin and Ethereum’s values fell considerably.

Even though crypto assets are presented in a highly fluctuating market, more specifically, the expansion of such ETFs is expected to attract new institutional market participants. And as more of these regulated products are produced, their entry barrier to institutional investors will also come down. 

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