March 27, 2024
Ethereum ETF Race Heats Up: Franklin Templeton Joins Amidst SEC Staking Debate
Latest Cryptocurrency News

Ethereum ETF Race Heats Up: Franklin Templeton Joins Amidst SEC Staking Debate

The competition for Ethereum ETF spots heats up as Franklin Templeton, a prominent Wall Street firm, enters the fray by submitting a proposal to the Securities and Exchange Commission today. Joining the ranks of BlackRock, Fidelity, Ark, 21Shares, Grayscale, VanEck, Invesco, Galaxy, and Hashdex, all of whom have recently filed applications for Ethereum ETFs, the asset manager is now part of a competitive landscape.

Following the launch of a spot Bitcoin ETF alongside nine other issuers four weeks ago, Franklin Templeton has now filed for a spot Ethereum ETF. This strategic move positions them in a market where BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) have seen significant demand. Despite a slower start with approximately $70 million in inflows, Franklin remains determined, contrasting with IBIT’s $3.5 billion and Fidelity’s $3 billion in Bitcoin inflows over the past month. The Securities and Exchange Commission (SEC) has postponed decisions on Ethereum ETF approval, aligning with expert forecasts.

JP Morgan estimates a less than 50% chance of approval before May, while Polymarket predicts a 50% chance of approval by May 31. Under the leadership of CEO Jenny Johnson since 2020, Franklin Templeton has been exploring the cryptocurrency space, shedding its traditional image. Recently, the company even added laser eyes to its logo, featuring Ben Franklin, on the social media platform X. The S-1 registration form filed by the firm outlines that the proposed “Franklin Ethereum Trust” aims to hold ETH and may occasionally stake a portion of the Fund’s assets with reputable staking providers. Staking involves securing digital coins or tokens to support blockchain network operations, with participants receiving token rewards for their contributions.

This move has sparked discussions among traditional finance entities and regulators, especially considering the SEC’s penalties against prominent crypto firms like Coinbase for allegedly offering unregistered securities through their staking services. With the SEC’s approval of 10 spot Bitcoin (BTC) ETFs for trading in January, following years of rejections, traditional investors now have access to cryptocurrency investment products on stock exchanges, without direct ownership. Since the approval of spot BTC ETFs, there has been a significant influx of billions of dollars into these funds, contributing to the cryptocurrency’s price surge. A report by British multinational bank Standard Chartered predicts that the SEC is likely to approve ETH ETFs by May, further adding to the anticipation in the market.

Image by A M Hasan Nasim from Pixabay

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