SEC Approves First Hybrid Bitcoin and Ethereum ETFs

The U.S. Securities and Exchange Commission (SEC) has approved the first spot exchange-traded funds (ETFs) combining Bitcoin and Ethereum. The issuers are Hashdex and Franklin Templeton.

“The asset allocation will be based on free-float market capitalisation,” the document states.

In June, the Nasdaq exchange, on behalf of Hashdex, submitted an application to the regulator to launch the Hashdex Nasdaq Bitcoin & Ethereum ETF.

In August, Franklin Templeton took a similar step regarding the Franklin Crypto Index ETF.

Bloomberg analyst James Seyffart noted the “great sense” in a “market cap-weighted ETF.”

His colleague Eric Balchunas predicted the launch of both instruments in January with Bitcoin and Ethereum shares at ~80% and ~20%, reflecting the current combined market value of the assets.

The spot bitcoin/ether combo ETFs have been approved by SEC (as predicted). Launch likely in January. They’re mkt cap weight so 80/20 btc/eth approx. Notable that Hashdex & Frankie are first. Good for them. https://t.co/o2ri3XpqZi

— Eric Balchunas (@EricBalchunas) December 20, 2024

Issuers are required to maintain portfolio transparency and pricing. Both exchanges will monitor compliance and may initiate delisting procedures if these requirements are not met.

The ETFs received approval amid the excitement surrounding BTC-ETF and ETH-ETF. Since their launch in January, the former attracted $36.33 billion, and the latter $2.4 billion in less than five months after registration.

On December 19, the continuous inflows into BTC-ETF and ETH-ETF were interrupted after 18 and 15 days, respectively. The outflow amounted to $680 million for the former and $60.5 million for the latter.

Nate Geraci, President of The ETF Store, suggested that following Hashdex and Franklin Templeton, other companies, including BlackRock, might launch spot combined Bitcoin and Ethereum ETFs.

Will be interesting to see if BlackRock or others attempt to piggyback on this & launch similar ETFs…

Regardless, I expect there will be meaningful demand for these products.

Advisors LOVE diversification.

Especially in an emerging asset class such as crypto.

— Nate Geraci (@NateGeraci) December 19, 2024

“I expect significant demand for these products. Advisors love diversification. Especially in an emerging asset class like cryptocurrencies,” the expert explained.

According to Sygnum’s calculations, every $1 billion inflow into BTC-ETF pushes Bitcoin up by 3-6%.

Previously, YouHodler exchange executive Ruslan Lienkha pointed to the prospects of including staking in Ethereum-ETF. Bernstein shares this view.

Some experts believe that the success of ETH-ETF could propel the second-largest cryptocurrency to a new all-time high.