SEC Approves Franklin, Hashdex Bitcoin and Ethereum ETFs for Nasdaq

The US Securities and Exchange Commission (SEC) has approved two cryptocurrency ETFs from Franklin Templeton and Hashdex, a big step towards bringing Bitcoin and Ethereum into the traditional financial markets.

These ETFs will trade on the Nasdaq and Cboe BZX exchanges and will give investors direct exposure to the Bitcoin and Ethereum spot markets while being compliant with federal securities laws.

Both ETFs—Hashdex Nasdaq Crypto Index US ETF and Franklin Templeton Crypto Index ETF—will hold Bitcoin, Ethereum, cash and cash equivalents. The SEC approval means they comply with key regulations including the Securities Exchange Act of 1934 and the Investment Company Act of 1940 which protect investors and provide transparency.

Market Impact Amid Crypto Volatility

The SEC approval comes at a time of high crypto market volatility. Bitcoin has dropped 11% this week and is trading just above $96,000, down from its high of $108,000. Ethereum has fallen 15% and is trading at $3,440. According to CoinGlass over $1 billion worth of crypto positions were liquidated in the last 24 hours.

Despite the chaos, analysts think the approval of these ETFs will stabilize the crypto market as more institutional investors come in. Market observers see this as a legal way for traditional investors to get into digital assets and potentially more adoption to come.

“These are a clear sign of crypto being part of the mainstream financial system,” said an analyst.

Enhanced Oversight and Future Prospects

The ETFs will track market capitalization weighted indexes for Bitcoin and Ethereum, giving investors a transparent and simple way to get exposure to the two largest cryptocurrencies without owning them directly.

  • Hashdex ETF: Tracks the Nasdaq Crypto Index.

  • Franklin Templeton ETF: Linked to the CF Institutional Digital Asset Index.

The SEC has put in place measures to prevent market manipulation by ensuring Bitcoin and Ethereum spot prices are correlated to the futures markets. Surveillance sharing agreements and data from CME Bitcoin and Ethereum futures markets add an extra layer of integrity.

Both ETFs exclude staking, airdrops and other revenue generating activities and only track spot prices to protect investors and provide transparency.

Going forward this could be the door opener for other cryptocurrency ETFs, including a Litecoin ETF which Bloomberg analysts think could be next. But digital assets like Solana and XRP may face more regulatory hurdles as they are under the microscope.

Key Takeaways:

  • SEC approves Franklin and Hashdex ETFs for Bitcoin and Ethereum, boosting institutional access.

  • Bitcoin and Ethereum spot prices are trading at $96,000 and $3,440, respectively, amid $1 billion in liquidations.

  • ETFs exclude staking and focus on transparency, aligning with regulatory frameworks.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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