Yet another legacy firm from Wall Street is entering the fray for a Bitcoin spot exchange-traded fund, following early applications from BlackRock and Fidelity.
Franklin Templeton, a financial heavyweight that dates its founding back to the mid-20th century, submitted an application for what it calls the “Franklin Bitcoin ETF” on Tuesday morning, according to a Securities and Exchange Commission filing.
Franklin Templeton's application says it would list the Bitcion ETF Cboe’s BZX Exchange, and like Blackrock, lists Coinbase as its Bitcoin custodian.
In the filing, Franklin Templeton writes that the firm would use the CF Benchmarks Index, a fusion of Bitcoin prices from a slew of separate crypto exchanges, to inform its prices and prevent potential price manipulation.
A spokesperson for the asset management firm declined to comment on the filing.
Franklin Templeton’s application comes after a unanimous federal appeals court last month found that the SEC had wrongly denied a bid by crypto firm Grayscale to launch a spot Bitcoin ETF. In its much-anticipated decision, the court said the denial was “inconsistent” with the agency’s prior approvals of ETFs for Bitcoin futures.
The push to obtain a spot Bitcoin ETF has been described as a “holy grail” for the crypto industry as approval is expected to attract potentially trillions of dollars in investment from conservative institutional investors like pension funds.
For years, firms like Grayscale have tried and failed to convince the SEC to approve a Bitcoin spot ETF, even though the agency approved a number of Bitcoin futures trading products. The SEC repeatedly cited potential market manipulation as one of the key factors for why it repeatedly denied companies’ ETF applications.
To allay the federal agency's concerns, BlackRock said it would partner with NASDAQ as a "surveillance partner" to monitor the Bitcoin markets and detect potential manipulation. After BlackRock's filing, ARK Invest, Fidelity, and others inserted similar agreements into their ETF applications. Franklin Templeton's filing for a spot Bitcoin ETF included no mention of a surveillance partner.
Bitcoin’s price soared above $31,000 in response to the ETF filings from BlackRock and Fidelity, but has since slumped, never regaining the same momentum that had propelled the world’s largest cryptocurrency to its highest price in more than a year.
Update, Sept. 12, 2023: Further details on Franklin Templeton's lack of surveillance partner in its initial ETF application were included.
