Asset manager Franklin Templeton applies to launch a spot Bitcoin ETF

• Franklin Templeton joins other asset management firms like Grayscale that have applied to offer crypto ETFs.
• The SEC was mandated by the court to evaluate Grayscale’s application to convert its Bitcoin futures ETF into a spot ETF.
• Franklin Templeton will collaborate with CF Benchmarks to ensure accurate valuation.

Franklin Templeton, a prominent asset management firm with $1.5 trillion in assets under management, has submitted an application to the United States Securities and Exchange Commission (SEC) seeking approval for the launch of a Bitcoin exchange-traded fund (ETF) that would track the price of Bitcoin in real-time.

This move by Franklin Templeton follows a series of notable developments in the cryptocurrency ETF space. In late August, the SEC opted to delay its decisions regarding spot ETF applications from several other companies, including WisdomTree, Valkyrie, Fidelity, VanEck, Bitwise, and Invesco. Furthermore, a significant court ruling on August 29th mandated that the SEC must evaluate Grayscale’s application to convert its Bitcoin futures ETF into a spot ETF.

Franklin Templeton’s ETF application

In their application, Franklin Templeton outlines the structure of the proposed fund. It would function as a trust, with Coinbase serving as the custodian for Bitcoin holdings. Bank of New York Mellon would take on the roles of cash custodian and administrator. Fund shares are intended to be traded on the Cboe BZX Exchange, a major securities exchange in the United States. The SEC has set its next deadline for making a decision on this application for October 16th.

In recognition of the regulatory uncertainties surrounding the digital asset market in the United States, Franklin Templeton explicitly acknowledges the risks in its application. They highlight the potential adverse impacts of legislative or regulatory developments, which could significantly affect the value of Bitcoin and the shares of the proposed ETF. Such impacts could include bans, restrictions, or imposing stringent conditions on various aspects of the cryptocurrency ecosystem, including trading, mining, digital wallets, custody services, and the overall operation of the Bitcoin network.

CF Benchmarks and Franklin Templeton partnership

To ensure accurate valuations, Franklin Templeton plans to collaborate with CF Benchmarks, a digital asset index provider regulated in the United Kingdom. CF Benchmarks would provide daily valuations based on data from reputable cryptocurrency exchanges, including Coinbase, Bitstamp, iBit, Kraken, Gemini, and LMAX Digital. These valuations would be updated at 5-minute intervals to reflect the real-time nature of the cryptocurrency market.

At the time of writing, the price of Bitcoin was trading at $25,952.26, underlining the dynamic and ever-changing nature of the digital asset market that Franklin Templeton seeks to tap into with its proposed Bitcoin ETF.