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Franklin Templeton Joins Crypto ‘Holy Grail’ Race, Files for Bitcoin ETF

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Yet another legacy firm from Wall Street enters the Bitcoin ETF race

Franklin Templeton, a financial heavyweight that dates its founding back to the mid–20th century, has submitted an application for a Bitcoin spot exchange-traded fund (ETF). This comes after early applications from BlackRock and Fidelity.

Franklin Templeton’s Bitcoin ETF Application

Franklin Templeton submitted its application for the “Franklin Bitcoin ETF” on Tuesday morning. The application was made to the Securities and Exchange Commission (SEC).

Listing and Custodian

The Bitcoin ETF proposed by Franklin Templeton would be listed on the Cboe BZX Exchange. Similar to BlackRock, Franklin Templeton has chosen Coinbase as its Bitcoin custodian.

Price Manipulation Prevention

In its filing, Franklin Templeton stated that it would use the CF Benchmarks Index to inform its prices and prevent potential price manipulation. This index combines Bitcoin prices from various crypto exchanges.

Franklin Templeton’s Silence

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

Recent Court Decision

Last month, a federal appeals court unanimously found that the SEC had wrongly denied a bid by Grayscale to launch a spot Bitcoin ETF. The court stated that the denial was inconsistent with the agency’s prior approvals of Bitcoin futures ETFs.

The Holy Grail for the Crypto Industry

Obtaining approval for a spot Bitcoin ETF has been described as a “holy grail” for the crypto industry. It is expected to attract trillions of dollars in investment from conservative institutional investors like pension funds.

SEC’s Concerns

The SEC has repeatedly denied Bitcoin spot ETF applications, citing potential market manipulation as a key factor. Despite approving Bitcoin futures trading products, the agency has been hesitant to approve spot ETFs.

Surveillance Partner

To address the SEC’s concerns, BlackRock announced a partnership with Nasdaq as a surveillance partner to monitor the Bitcoin markets and detect potential manipulation. Other firms, including ARK Invest and Fidelity, have also included similar agreements in their ETF applications. However, Franklin Templeton’s filing did not mention a surveillance partner.

Bitcoin’s Price Reaction

Bitcoin’s price soared above $31,000 in response to the ETF filings from BlackRock and Fidelity. However, it has since slumped and failed to regain the same momentum.

Update, Sept. 12, 2023: Franklin Templeton’s initial ETF application does not include a surveillance partner.

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