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Franklin Templeton Enters the Spot Bitcoin ETF Race

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Franklin Templeton enters the arena with BlackRock, Fidelity and others in the spot bitcoin ETF race.

Bitcoin token against trading screens

(André François McKenzie/Unsplash)

Posted September 12, 2023 at 11:27 am EST.

Asset management giant Franklin Templeton has entered the arena, joining other major investing players, such as BlackRock and Fidelity, in the race to secure approval for a spot bitcoin exchange-traded fund (ETF) in the US.

The asset manager, which oversees $1.5 trillion in assets, filed a Form S-1 with the U.S. Securities and Exchange Commission (SEC) on Sep. 12 outlining its plans. The filing shows that the ETF intends to list on Cboe’s BZX exchange and use CME Group’s CF Bitcoin Reference Rate – New York Variant — for bitcoin pricing.

Coinbase is listed as the custodian for the ETF’s bitcoin holdings, while BNY Mellon will be the custodian for the fund’s cash holdings, according to the filing.

A spokesperson for Franklin Templeton declined to comment on the filing.

An ETF is a type of investment fund that tracks the price of an asset or group of assets. In the case of a bitcoin ETF, it offers a way for investors to gain access to the asset class  within their brokerage accounts and without the need to manage a crypto wallet or private keys.

“The shares are intended to offer a convenient means of making an investment similar to an investment in bitcoin relative to acquiring, holding and trading bitcoin directly on a peer-to-peer or other basis or via a digital asset exchange,” the filing said.

While some players have made multiple attempts over the years at trying to secure an approval for a US spot bitcoin ETF, this is Franklin Templeton’s first attempt. The investment firm is no stranger to digital assets, however, having launched an on-chain US government money fund back in 2019 and then founding its digital assets investment strategies team the following year.

The Battle for a Bitcoin ETF Approval

Though there’s been many attempts from players such as Gemini, Bitwise and Grayscale in recent years, the SEC has never approved a spot bitcoin ETF application.

BlackRock, Fidelity, Invesco, Bitwise, Ark Invest and Wisdom Tree are among the current contenders for a spot bitcoin ETF approval. The SEC recently delayed making a decision on existing proposals, pushing the decision date to Oct. 19.

Franklin Templeton’s filing comes as Grayscale Investments won its lawsuit against the SEC in the D.C. Circuit Court of Appeals over the SEC’s denial to convert its bitcoin trust (GBTC) to an ETF. While the decision does not force the SEC to approve Grayscale’s conversion application, the agency can no longer deny the conversion with the reasons it has previously used.

The judge said “the denial of Grayscale’s proposal [is] arbitrary and capricious because the commission failed to explain its different treatment of similar products.”

Many believe the Grayscale ruling now tilts the scales in favor of a bitcoin ETF approval. Bloomberg Intelligence’s ETF analysts think there is a 95% chance that a bitcoin spot ETF launches in the US by the end of next year, according to an August report.

Bitcoin has risen 3.9% within the last 24 hours to $26,115, according to data from CoinGecko.

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