Bitcoin and Ether ETFs Gain SEC Approval for U.S. Market
Bitcoin and Ether ETF– The U.S. Securities and Exchange Commission (SEC) has granted approval for the Nasdaq and Cboe BZX Exchange to list and trade shares of the first-ever crypto index exchange-traded funds (ETFs) from Hashdex and Franklin Templeton. This marks a significant milestone for the cryptocurrency market, as the SEC’s approval paves the way for these funds to be traded on major U.S. exchanges starting in January.
Key Features of the Approved Crypto Index ETFs
The two ETFs—Hashdex’s Nasdaq Crypto Index US ETF and Franklin Templeton’s Crypto Index ETF—will hold spot Bitcoin (BTC) and spot Ether (ETH) based on their respective market capitalizations. According to Bloomberg ETF analyst Eric Balchunas, these ETFs will have an approximate 80/20 split in favor of Bitcoin. Both funds are expected to launch in January, with the Nasdaq Crypto Index US ETF trading under the ticker NCIQ, and the Franklin Crypto Index ETF under the ticker EZPZ.
SEC’s Rationale for Approval
The SEC’s approval is grounded in the similarities between the newly approved funds and previously authorized spot Bitcoin and Ethereum ETFs. The SEC noted in its decision that the filings from Hashdex and Franklin Templeton are substantially similar to those of the spot Bitcoin ETP and spot Ether ETP proposals approved in prior Commission orders. This approval follows a series of amendments to the S-1 filings, with both firms meeting the SEC’s criteria for compliance and investor protection.
Market Response and Potential for Further ETFs
While Hashdex and Franklin Templeton are the first to receive approval for crypto index ETFs in the U.S., the market is keenly watching to see if other firms like BlackRock and Valkyrie will attempt to launch similar products. Nate Geraci, President of The ETF Store, highlighted that there would likely be strong demand for these products, especially given the growing interest in cryptocurrency diversification among financial advisers.
Advisors love diversification, particularly in emerging asset classes like crypto, Geraci commented. As demand for crypto-related ETFs continues to grow, these products are expected to attract both institutional and retail investors alike.
The Growing U.S. Crypto ETF Market
This approval adds to a rapidly expanding crypto ETF market in the U.S., which has seen significant growth over the past year. In January 2024, the SEC approved a series of spot Bitcoin ETFs, including those from Ark Invest, BlackRock, Fidelity, and others. These products have collectively attracted billions in net inflows, with Bitcoin ETFs alone amassing over $36 billion in assets under management (AUM).
However, despite the enthusiasm surrounding Bitcoin ETFs, Ethereum ETFs have been less popular, with total inflows of $2.4 billion and AUM of $12 billion as of the latest reports.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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