SEC Approves Bitcoin and Ethereum ETFs for the First Time

The US Securities and Exchange Commission (SEC) made history this week by approving the first-ever hybrid Bitcoin and Ethereum ETFs from Hashdex and Franklin Templeton. This approval marks a significant step in expanding institutional access to the world of cryptocurrency.

After thorough reviews dating back to June, the SEC gave its stamp of approval on Thursday, December 19, for the first spot exchange-traded funds (ETFs) that combine Bitcoin and Ethereum. These ETFs will offer investors a unique opportunity to invest in both of these popular digital assets.

The Hashdex Crypto Index US ETF will be listed on the Nasdaq exchange, while the Franklin Crypto Index ETF will trade on the Cboe BZX exchange. The Franklin Crypto Index ETF will track the Institutional Digital Asset Index, which includes assets like Bitcoin and Ether. On the other hand, Hashdex’s Crypto Index ETF will be based on the Nasdaq Crypto US Settlement Price Index, which also includes Bitcoin and Ether.

The allocation of Bitcoin and Ether in these hybrid ETFs will be based on their free-float market capitalizations. Analyst Eric Balchunas predicts that the distribution could be around 80% Bitcoin and 20% Ethereum in these hybrid ETFs.

The launch of these hybrid ETFs is expected to take place in January 2025. Hashdex has plans to potentially include other digital assets like Solana and Cardano in the future, aiming to diversify across multiple major cryptocurrencies to reduce volatility.

Hashdex and Franklin Templeton are not alone in their pursuit of a crypto index ETF. Earlier this year, NYSE Arca requested approval to list both a Grayscale crypto index ETF and a Bitwise ETF that holds Bitcoin and Ether. US regulators are currently reviewing these listings for approval.

The approval of these new hybrid crypto ETFs comes at a time of significant activity in the crypto ETF market. BlackRock’s IBIT leads the way in Bitcoin products, with $56 billion in assets under management (AUM).

Overall, this development is a significant milestone in the world of cryptocurrency investments. With regulatory changes and a more favorable landscape for crypto ETFs, investors have new opportunities to explore the world of digital assets in a more accessible way.