FameEX Hot Topics | Franklin Templeton's Bid to Introduce Spot Bitcoin ETF in the United States

Franklin Templeton, a prominent asset manager with over $1.4 trillion in assets, is seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch the first-ever spot Bitcoin exchange-traded fund (ETF) in the United States. This move follows similar efforts by major investment firms like Fidelity and BlackRock.

On Tuesday, Franklin Templeton submitted its application to the SEC, marking its entry into the competitive race to offer a Bitcoin ETF. If granted approval by the SEC, Franklin Templeton intends to partner with Coinbase, a leading U.S. cryptocurrency exchange, to serve as the custodian for the ETF's Bitcoin holdings. Additionally, it plans to collaborate with Bank of New York Mellon to manage the fund's cash reserves, as reported by Bloomberg.

This development highlights the growing interest in Bitcoin ETFs among leading asset management companies. The SEC's willingness to review applications from established market players, such as BlackRock, reflects a more positive outlook for the cryptocurrency space this year.

While the SEC approved ETFs that hold Bitcoin futures in 2021, it has yet to approve a spot Bitcoin ETF. In August, the regulatory body deferred decisions on seven applications, including those from Invesco Galaxy, WisdomTree, Bitwise, VanEck, Fidelity's Wise Origin, BlackRock, and Valkyrie. The SEC explained the delay as necessary to thoroughly assess the proposals, citing past concerns about fraud and market manipulation.

Notably, a recent court ruling favoring Grayscale Investments in its battle with the SEC could influence the regulator's approach. In a significant development, a federal appeals court overturned the SEC's refusal to allow Grayscale to convert its Bitcoin trust into an ETF. This legal precedent suggests that the SEC may eventually need to approve multiple spot Bitcoin ETFs simultaneously.

The race to offer the first spot Bitcoin ETF in the United States underscores the growing institutional interest in cryptocurrencies. If Franklin Templeton's application succeeds, it could open new avenues for retail and institutional investors to access Bitcoin through traditional investment vehicles. However, the final decision rests with the SEC, which will carefully evaluate the proposal, taking into account its potential impact on the market and investor protection.

In the ever-evolving landscape of cryptocurrency regulation, the approval of a spot Bitcoin ETF would mark a significant milestone, potentially paving the way for broader acceptance and integration of cryptocurrencies into traditional financial markets.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.