Franklin Templeton registers for spot Ethereum ETF amid growing competition | Mint
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Business News/ Markets / Cryptocurrency/  Franklin Templeton registers for spot Ethereum ETF amid growing competition
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Franklin Templeton registers for spot Ethereum ETF amid growing competition

Franklin Templeton joins seven other ETF providers in the race to introduce spot Ethereum ETFs, after all contenders rolled out spot Bitcoin products in January.

Franklin Templeton becomes eight company to venture into crypto ETF space with spot Ethereum ETF (Pixabay)Premium
Franklin Templeton becomes eight company to venture into crypto ETF space with spot Ethereum ETF (Pixabay)

Asset management firm Franklin Templeton has officially entered the competition for a spot Ethereum Exchange-Traded Fund (ETF), becoming the eighth player in the market seeking approval for a similar product, Reuters reported.

This January, in a significant development for the cryptocurrency industry, the United States Securities and Exchange Commission (US SEC) approved 11 spot Bitcoin ETFs in January. This marked a watershed moment, fulfilling a decade-long demand for regulatory approval within the crypto space.

Also Read | Bitcoin surges to $50,000 for the first time since 2021 on ETF demand

Spot Crypto ETFs Explained

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 direct purchase.

With Franklin Templeton's registration, there are now eight ETF providers competing to introduce spot Ethereum ETFs, the report added. Notably, all these contenders had rolled out spot Bitcoin products in the same month.

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Asset Disparities among Major Players

While BlackRock and Fidelity, the leading contenders in the spot 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. As per data from BitMEX Research, assets in Franklin's Bitcoin ETF total only $77 million, with seven out of the nine newly launched spot Bitcoin ETFs holding assets surpassing $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, signalling 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 verdict on Grayscale Investments' application to convert its Ethereum trust product into a spot ETF. Similarly, BlackRock's application for a similar product faced a delay. VanEck was the first to file 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 crypto 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 AM IST
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