Franklin Templeton, a major global asset manager overseeing approximately $1.5 trillion in assets, has officially entered the race to launch a spot Bitcoin exchange-traded fund (ETF). The firm submitted a filing with the US Securities and Exchange Commission (SEC) to list the Franklin Bitcoin ETF on the Cboe BZX Exchange.
This proposed ETF aims to track Bitcoin’s market performance directly and will be structured as a series of the Franklin Templeton Digital Holdings Trust. The fund’s shares will be backed by physical Bitcoin held in custody by Coinbase Custody Trust Company.
The move places Franklin Templeton among a growing list of established financial firms seeking regulatory approval for a spot Bitcoin ETF in the United States.
Growing Interest in Bitcoin ETFs
Franklin Templeton’s application is part of a broader wave of renewed interest in spot Bitcoin ETFs. Earlier this year, major firms like BlackRock and Fidelity also refiled their proposals, signaling strong institutional demand.
These filings indicate a shift in how traditional finance views Bitcoin—not just as a speculative asset but as a legitimate store of value worthy of inclusion in regulated investment vehicles.
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Many industry experts believe that recent regulatory and legal developments have improved the chances of approval. Although the SEC has historically been hesitant to greenlight physically-backed Bitcoin ETFs, the landscape appears to be changing.
The Role of the Grayscale court ruling
A significant turning point in the regulatory outlook was Grayscale’s court victory against the SEC in August 2023. The DC Circuit Court of Appeals ruled that the SEC’s rejection of Grayscale’s proposal to convert its Bitcoin Trust (GBTC) into an ETF was “arbitrary and capricious.”
This ruling did not automatically approve Grayscale’s conversion request, but it did force the SEC to reconsider its stance using more consistent reasoning. Many analysts upgraded their approval probability forecasts following this decision.
Bloomberg Intelligence, for example, raised its likelihood of a spot Bitcoin ETF approval by the end of 2023 from 65% to 75%. Some even project a 95% chance of launch by the end of 2024.
Franklin Templeton’s crypto experience
Unlike some traditional asset managers, Franklin Templeton is no newcomer to digital assets. The firm already offers a mutual fund that uses Stellar and Polygon blockchains for operational efficiency and transparency.
Roger Bayston, Head of Digital Assets at Franklin Templeton, has previously stated that blockchain technology will be “transformational” for capital markets. This existing expertise may position the firm favorably in the evolving digital asset ecosystem.
What a spot Bitcoin ETF means for investors
A spot Bitcoin ETF would provide everyday investors with a familiar and regulated way to gain exposure to Bitcoin without having to manage private keys or use cryptocurrency exchanges. It would trade on traditional stock exchanges, making it accessible through conventional brokerage accounts.
Such a product could significantly broaden Bitcoin’s investor base, increase liquidity, and further legitimize cryptocurrencies as an asset class.
Frequently Asked Questions
What is a spot Bitcoin ETF?
A spot Bitcoin ETF is an exchange-traded fund that holds actual Bitcoin. Its share price is designed to track the market price of Bitcoin, allowing investors to gain exposure without directly buying or storing the cryptocurrency.
How is Franklin Templeton’s ETF different from futures-based Bitcoin ETFs?
Futures-based ETFs hold Bitcoin futures contracts rather than physical Bitcoin. A spot ETF holds Bitcoin directly, which many investors prefer because it more accurately reflects Bitcoin’s real-time price and avoids the complexities and costs associated with rolling futures contracts.
Why hasn’t the SEC approved a spot Bitcoin ETF yet?
The SEC has expressed concerns about market manipulation, custody, and investor protection in the Bitcoin market. However, recent court rulings and improved market infrastructure—such as surveillance-sharing agreements with regulated exchanges—may address these concerns.
When could the Franklin Bitcoin ETF be approved?
There is no guaranteed timeline. However, many analysts believe the SEC could approve one or more spot Bitcoin ETFs before the end of 2024, especially following the Grayscale court decision.
How will the ETF hold Bitcoin?
According to the filing, Franklin Templeton’s ETF will use Coinbase Custody Trust Company as its custodian. This means Coinbase will securely hold the actual Bitcoin that backs the ETF’s shares.
Is Franklin Templeton already involved in crypto?
Yes. The firm has experience with blockchain technology through its existing mutual fund that operates on the Stellar and Polygon networks. This gives them practical insight into digital asset infrastructure.