SEC Approves Crypto Index ETFs From Hashdex And Franklin Templeton

The U.S. Securities and Exchange Commission (SEC) has approved crypto index exchange-traded funds (ETFs) from Hashdex and Franklin Templeton, which will list on Nasdaq and Cboe BZX Exchange, respectively.

These funds will include spot Bitcoin and Ether with roughly 80/20 market capitalization split and are expected to launch in January 2025.

The Hashdex Nasdaq Crypto Index US ETF will trade under the ticker NCIQ, and the Franklin Crypto Index ETF will use the ticker EZPZ. Both funds have secured custodians such as BitGo and Coinbase. Hashdex’s ETF may expand to include other cryptocurrencies like AVAX, LINK, and LTC if regulators approve them.

The SEC’s approval follows earlier approvals for spot Bitcoin and Ethereum ETFs, citing similarities in their amended filings. Industry analysts expect these products to attract decent demand due to their diversification, with Bloomberg’s Eric Balchunas highlighting the importance of this milestone for Hashdex and Franklin Templeton.

The broader U.S. crypto ETF market has seen rapid growth, with combined Bitcoin ETFs attracting over $36 billion in inflows and Ethereum ETFs pulling in $2.4 billion since their launches. Franklin’s Bitcoin and Ethereum spot ETFs alone generated net inflows of $461.5 million and $41.5 million, respectively.

Future ETF approvals may include Solana and XRP, but analysts suggest Litecoin and Hedera could precede them due to regulatory clarity.

Earlier this year, the SEC raised concerns with potential Solana ETF issuers about the cryptocurrency possibly being classified as a security. The concerns resulted in the rejection of the 19b-4 forms, which are essential for ETF approval. These forms, typically filed by exchanges on behalf of issuers, were not submitted to the Federal Register, which would have triggered the SEC’s formal review process.

Without these filings, the approval process for Solana ETFs cannot proceed, relieving the SEC from immediate pressure to make a decision.

The SEC’s stance on Solana was not unexpected, as the agency previously labeled Solana as a security in various court filings. Issuers are now considering new filings or amendments to the 19b-4 forms to argue more effectively that Solana should not be classified as a security.

While Bitcoin and Ethereum ETFs successfully cleared regulatory hurdles and started trading, market analysts have remained skeptical about the chances for Solana ETFs.

Nate Geraci, president of investment advisor The ETF Store, suggested that Solana ETFs are unlikely to gain approval under the Biden Administration. Bloomberg Intelligence’s ETF expert James Seyffart also said that Solana ETFs might only have a chance of approval in 2025, contingent on a change in the White House and SEC administration.