Franklin Templeton has initiated the process for an Ethereum exchange-traded fund (ETF), as per recent filings with the Securities and Exchange Commission (SEC).
The asset manager’s move aligns with a growing trend among major financial institutions. Notable players such as BlackRock, Fidelity, Ark, 21Shares, Grayscale, VanEck, Invesco, Galaxy, and Hashdex have all filed applications for Ethereum ETFs in recent months.
Franklin Templeton’s decision comes on the heels of its recent foray into the Bitcoin ETF arena, joining nine other issuers. Despite the success witnessed by asset management giants like BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC), Franklin’s Bitcoin ETF has faced challenges. Since its launch, it has only attracted around $70 million in inflows, a figure dwarfed by the over $3.5 billion garnered by IBIT and roughly $3 billion by Fidelity.
The SEC has remained cautious in its approach, delaying decisions on Ethereum ETFs, as anticipated by industry experts. JP Morgan analysts estimate the probability of approval for such funds before May at less than 50%. However, traders on Polymarket, a decentralized prediction platform, seem to be more optimistic, suggesting a 50% chance of ETF approval by May 31.
Franklin Templeton’s venture into cryptocurrencies under the leadership of CEO Jenny Johnson, who assumed the position in 2020, marks a notable shift for the company often perceived as traditional. The firm has made strategic moves in the crypto sphere, notably adorning its logo with laser eyes, a symbolic gesture within crypto culture, on the social media platform X (formerly Twitter).
Market dynamics reflect growing enthusiasm for cryptocurrencies. Ether (ETH) experienced a 5.5% surge in the last 24 hours, trading close to $2,647, while Bitcoin (BTC) breached the $50,000 mark on Monday, marking its first ascent to that level since late 2021.
As financial institutions increasingly embrace digital assets, the pursuit of Ethereum ETFs signifies a broader acknowledgment of the growing significance of blockchain technology and its potential to reshape traditional finance paradigms. Amidst regulatory scrutiny and market volatility, the path towards mainstream adoption of cryptocurrencies continues to evolve, with Franklin Templeton’s Ethereum ETF initiative standing as a testament to this transformative journey.
