SEC delays decision on Franklin Templeton crypto index ETF to 2025 

The U.S. Securities and Exchange Commission (SEC) has extended its review period for Franklin Templeton’s proposed crypto index ETF, pushing the decision to early 2025. 

According to a letter dated Nov. 20, the SEC noted that no public comments were submitted following the proposed rule change’s publication in the Federal Register on Oct. 8, 2024. The original 45-day review period was scheduled to expire on November 22, 2024, after the proposal was published in the Federal Register on October 8.

The regulator cited the need for additional time to evaluate the proposal, stating: 

The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.

~SEC

The watchdog further specified that they had designated January 6, 2025, as the date by which the Commission shall either approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule change. 

Crypto Index ETFs mark the next logical step for expanding digital asset markets

Franklin Templeton initially filed its application for a crypto index ETF in August 2024, positioning itself among several firms vying to launch such products in the U.S. At the time, Katalin Tischhauser, head of research at Sygnum crypto bank, called crypto index ETFs “the next logical step” for digital asset markets. 

Tischhauser highlighted that index ETFs enable investors to gain exposure to broader market movements without the complexities of selecting individual assets, reducing the risk of costly errors. This strategy mirrors the success of traditional stock indexes like the S&P 500. 

In October, the New York Stock Exchange signaled interest in listing Grayscale’s crypto index ETF, seeking regulatory approval for the new financial instrument. By November, U.S. regulators indicated they were actively considering the Grayscale application. 

U.S. Crypto Index ETFs promise to unlock new investment opportunities

The approval of a crypto index ETF in the U.S. would mark a major milestone, potentially unlocking significant capital inflows into the digital asset space. As the SEC deliberates, the crypto industry anticipates how these products could transform investment opportunities.

Currently, 11 spot Bitcoin ETFs and 8 spot Ethereum ETFs are actively trading in the market. Furthermore, Bitwise has filed to convert its 10 Crypto Index Fund into an ETF with 75% allocated to Bitcoin and 16% to Ethereum.

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