Franklin Templeton, an investment firm, has joined the list of applicants seeking approval for a Bitcoin exchange-traded fund (ETF).
On September 12th, Franklin submitted an application to the US Securities and Exchange Commission (SEC) for a Bitcoin (BTC) ETF. This move aligns them with other notable contenders such as BlackRock, Ark, and 21Shares, who have sought approval for an ETF linked to the largest cryptocurrency, designed to track its price movements.
Franklin’s application comes shortly after the SEC’s recent decision to postpone judgment on several similar ETF applications. This delay followed a federal court’s ruling, which overturned the agency’s prior decision to block Grayscale’s ETF.
Franklin Templeton Application
With assets under management nearing $1.5 trillion, Franklin Templeton has unveiled its latest venture—a Bitcoin ETF. In a filing with the SEC, the company has indicated its intention to list this ETF on the Cboe BZX Exchange.
This Bitcoin ETF is envisioned as a ‘series’ within Franklin’s Digital Holdings Trust, as outlined in the submitted document.
“The Fund is the sole series of the Trust. Its primary purpose is to hold Bitcoin transferred to the Fund in exchange for Shares issued by the Fund,” the filing explains. “Each Share represents a fractional, undivided beneficial interest in the net assets of the Fund.”
The proposed custodian for this fund is the Coinbase Custody Trust Company, signifying that the shares will be backed by Bitcoin held within the cryptocurrency exchange.
Grayscale’s Recent Victory
Confidence in the potential approval of the first-ever BTC spot ETF has surged. On August 29th, the District of Columbia Court of Appeals overturned the SEC’s previous denial of Grayscale’s ETF application.
This ruling prompted Bloomberg Intelligence analysts to raise the likelihood of a Bitcoin ETF receiving approval from 65% to 75% by the end of this year. In an August research report, the analysts even suggested a 95% chance that a BTC spot ETF would be launched in the US before the conclusion of 2024.
While Grayscale’s application has not yet received approval, this development sets the stage for the inaugural spot ETF tracking Bitcoin. The SEC will need to provide a different rationale for denial, as the initial rejection was deemed ‘arbitrary and capricious.
However, it’s worth noting that the SEC retains the option to file an appeal against this decision, which could lead to either a hearing before the US Supreme Court or a panel review.
ETF Decisions Facing Delays
Franklin’s application, while noteworthy, arrives nearly two weeks following the SEC’s postponement of judgments on several similar ETF applications, including those from BlackRock and WisdomTree.
The SEC’s next deadline for reaching a verdict on these ETF applications is October 16th. However, it’s important to note that the agency retains the option to extend this timeline further. It can continue to delay the decision until March 2024, when a final ruling must be reached.
Bitcoin’s Price Rally
Since Franklin’s application, BTC has experienced a notable price surge. It surged past the $26,000 mark and is presently trading at $26,201.
The largest cryptocurrency in the market has witnessed a 3.46% increase in value over the last 24 hours.
Bitcoin’s recent surge follows a period of significant volatility for the cryptocurrency. On September 11th, the digital asset witnessed a sharp decline, reaching a three-month low. This drop occurred amid speculations regarding FTX’s ability to sell crypto holdings exceeding $7 billion.
BTC reached its lowest point at $24,930.30 on September 11th but has since rebounded with a 5% increase.
This news is only analytical and informative and is not a recommendation for investment in any way.
