SEC Greenlights First U.S. Crypto Index ETFs, Featuring Both Bitcoin and Ether
In a milestone for the U.S. crypto market, the Securities and Exchange Commission (SEC) has signed off on separate applications from the Nasdaq and Cboe BZX Exchange to list and trade the nation’s first crypto index exchange-traded funds. The two newly approved products, one managed by Hashdex and the other by Franklin Templeton, combine spot exposure to both bitcoin and ether.
According to Bloomberg ETF analyst Eric Balchunas, both the Hashdex Nasdaq Crypto Index US ETF and the Franklin Crypto Index ETF are poised to feature approximately an 80/20 weighting of bitcoin to ether, reflecting their current market capitalizations. He expects these funds to make their debut in January. “The spot bitcoin/ether combo ETFs have been approved by the SEC (as predicted),” Balchunas said in a post on X (formerly Twitter) late Thursday. “Launch likely in January. They’re market cap weight so 80/20 BTC/ETH approx. Notable that Hashdex and Frankie are first. Good for them.”
Industry leaders anticipate significant interest in these products. Nate Geraci, President of The ETF Store, noted that advisors often embrace diversification, particularly in emerging asset classes such as cryptocurrencies. “Will be interesting to see if BlackRock or others attempt to piggyback on this and launch similar ETFs,” Geraci said. “Regardless, I expect there will be meaningful demand for these products. Advisors LOVE diversification.”
The SEC’s approval order highlighted that both the Hashdex and Franklin Templeton filings contained representations closely mirroring previously authorized spot bitcoin and ether ETFs, reinforcing the regulatory consistency of the decision.
First Crypto Index ETFs in the U.S.
These newly approved products mark a significant first for the U.S. Hashdex initially filed its S-1 registration with the SEC in July, following Nasdaq’s submission of a 19b-4 form in June. Although the SEC initially delayed its ruling, it ultimately granted approval on Thursday. In its November amendment, Hashdex indicated that other cryptocurrencies—such as AVAX, LINK, and LTC—could be considered for inclusion if they meet eligibility requirements and gain regulatory clearance. The Hashdex Nasdaq Crypto Index US ETF will trade under the ticker NCIQ. Key custodians for the fund include BitGo, Coinbase, Fidelity, and Gemini.
Franklin Templeton submitted its S-1 for a crypto index ETF in August, also facing an initial postponement from the SEC before receiving accelerated approval on Thursday. Like the Hashdex fund, Franklin’s ETF may add further cryptocurrencies once they obtain regulatory approval, though no specific assets have been named. The Franklin Crypto Index ETF will trade under the ticker EZPZ, with BitGo and Coinbase serving as its primary custodians.
A Rapidly Expanding U.S. Crypto ETF Landscape
The U.S. crypto ETF market has grown at a remarkable pace. On January 11, the SEC granted accelerated approval for 11 spot bitcoin ETFs, including those from Ark Invest/21Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, Grayscale, Invesco, Valkyrie (now CoinShares), VanEck, and WisdomTree. They began trading the following day, quickly attracting substantial investor interest. Hashdex converted a futures-based ETF into a spot bitcoin ETF in March, followed by Grayscale introducing a smaller-scale bitcoin ETF in July.
These spot bitcoin ETFs have collectively secured more than $36 billion in net inflows, amassing around $110 billion in assets under management amid surging bitcoin prices throughout the year. Although spot ether ETFs have garnered comparatively less traction, they still brought in about $2.4 billion in total net inflows since their July debut, accumulating $12 billion in assets.
Franklin’s EZBC spot Bitcoin ETF has gained roughly $461.5 million in net inflows, while its spot Ethereum product, EZET, attracted $41.5 million. Hashdex’s spot Bitcoin ETF, DEFI, has brought in approximately $0.7 million in net inflows since its conversion. The firm ultimately chose not to move forward with its earlier plan for a spot Ethereum ETF.
As the U.S. market continues to evolve, these new crypto index ETFs from Hashdex and Franklin Templeton broaden the options available to investors and may encourage other providers to explore similar products.