Franklin Templeton Enters Bitcoin ETF Race with Cboe Listing Plan

Franklin Templeton has joined the spot bitcoin ETF sweepstakes as the latest TradFi titan.

 The firm, which administers assets worth nearly $1.5 trillion, disclosed in a filing on Tuesday that it intends to list such a fund on the Cboe BZX Exchange. 

The document indicates that the Franklin Bitcoin ETF would be a “series” within the Franklin Templeton Digital Holdings Trust.

It aims to “typically reflect the bitcoin price performance before the fund’s expenses are deducted.” The ETF’s shares would be secured by bitcoin held by the fund’s custodian, Coinbase Custody Trust Company. 

A Franklin Templeton representative declined to comment beyond the filing. The Securities and Exchange Commission (SEC)) is presently considering a large number of similar applications. 

Ark and 21Shares refiled for a spot bitcoin ETF in April, roughly two months before BlackRock announced intentions to launch a comparable product.

BlackRock’s participation in the pursuit of a Bitcoin ETF prompted Fidelity, Invesco, Bitwise, and a few other issuers to retry their efforts. 

Though issuers have long sought to introduce a bitcoin-backed ETF to the US market, the SEC has never permitted one to begin trading. 

Grayscale Investments won a case against the SEC in the DC Circuit Court of Appeals a few weeks before Franklin Templeton’s filing. 

The judges in that case said the SEC’s denial of Grayscale’s conversion of its Bitcoin Trust (GBTC) to an ETF while allowing bitcoin futures ETFs to come to market was “arbitrary and capricious.

Although the decision does not compel the SEC to sanction the GBTC conversion, the judges informed the agency that it could not deny the conversion for the reasons it had previously cited.

Some industry observers said that the ruling increased the likelihood that the SEC would eventually authorize a spot bitcoin ETF, possibly by the end of the year. 

The decision prompted Bloomberg Intelligence analysts, for example, to increase the probability of Bitcoin ETF approval by the end of 2023 from 65% to 75%.

In an August research note, analysts predicted a 95% chance that such a product would launch in the United States by the end of 2024.