September 12, 2023 at 15:05 GMTModified date: September 12, 2023 at 15:10 GMT
September 12, 2023 at 15:05 GMT

Franklin Templeton files for spot Bitcoin ETF

Investment firm Franklin Templeton is the latest to apply for a spot Bitcoin exchange-traded fund (ETF).

Franklin Templeton files for spot Bitcoin ETF

Investment firm Franklin Templeton is the latest to apply for a spot Bitcoin exchange-traded fund (ETF). 

Today, 12 September, Franklin filed with the US Securities and Exchange Commission (SEC) for a $BTC ETF. It follows the likes of BlackRock, Ark and 21Shares to apply for the fund that would use the largest crypto as the underlying asset and track its price. 

Franklin’s application comes just over a week after the SEC delayed making a decision on several similar ETF applications. This was in light of a federal court overturning the agency’s decision to block Grayscale’s ETF

Franklin Templeton’s application

The asset manager manages nearly $1.5trillion in assets. Its latest planned product is a Bitcoin ETF. It revealed in a SEC filing that it would list this fund on the Cboe BZX Exchange. 

This Bitcoin ETF is planned to be a “series” within the Franklin’s Digital Holdings Trust, according to the filed document. 

“The Fund is the sole series of the Trust. The purpose of the Fund is to own bitcoin transferred to the Fund in exchange for Shares issued by the Fund,” the filing said. “Each Share represents a fractional undivided beneficial interest in the net assets of the Fund.”

Coinbase Custody Trust Company is proposed to be the fund’s custodian, meaning the shares would be backed by Bitcoin held by the cryptocurrency exchange

Grayscale’s recent win

Confidence in the potential first ever BTC spot ETF recently experienced a high. On 29 August, the District of Columbia Court of Appeals overturned the SEC’s decision that initially denied Grayscale’s application for the ETF. 

The ruling saw Bloomberg Intelligence analysts increase the likelihood of a Bitcoin ETF gaining approval from 65% to 75% by the end of this year. In an August research report, the analysts said there is a 95% chance that a BTC spot ETF will launch in the US before the end of 2024.

While Grayscale’s application has not been approved, this paves the way for the first spot ETF tracking Bitcoin. It means the SEC will have to file a different reason to deny the application as the initial rejection was described as “arbitrary and capricious”.

But, the SEC can file an appeal for this decision, which would either be brought before the US Supreme Court or undergo a panel review.

Delayed ETF decisions

However, Franklin’s application comes almost two weeks after the SEC delayed decisions on numerous similar ETF applications. These included from BlackRock and WisdomTree.

The next deadline for the SEC to make a decision on these ETF applications is 16 October. But, the agency can decide to delay it even further. It can be continuously delayed until March 2024, when a final decision must be made. 

Bitcoin price rally

BTC has seen a price surge since Franklin’s filing was made. It jumped above the $26,000 barrier and is currently trading at $26,201. 

The market’s largest crypto is up 3.46% over the past 24 hours. 

Bitcoin’s recent surge continues a volatile period for the cryptocurrency. The digital asset crashed on 11 September, dropping to a three-month low. This was in anticipation over a decision on whether FTX can sell over $7bn in crypto holdings. 

BTC plummeted to a low of $24,930.30 on 11 September. It has since climbed by 5%.