SEC Approves First Hybrid Bitcoin-Ethereum ETFs From Hashdex, Franklin Templeton

After several extended reviews since June of this year, the Securities and Exchange Commission (SEC) has finally approved the first spot exchange-traded funds combining Bitcoin and Ethereum.

The agency has authorized Nasdaq to list the Hashdex Nasdaq Crypto Index US ETF and the Cboe BZX Exchange to list the Franklin Crypto Index ETF, according to a archiving published Thursday.

“The proportion of bitcoin and ether that each trust owns will be based on free-floating market values,” the filing states.

Senior Bloomberg ETF Analyst Eric Balchunas expect the funds to launch in January with an approximately 80% Bitcoin and 20% Ethereum split, reflecting current market values.

The funds must comply with ongoing listing requirements and maintain transparency around portfolio holdings and pricing. Both exchanges will monitor compliance and may initiate delisting procedures if requirements are not met.

Trading in the ETF shares will be subject to applicable rules for equity securities on both exchanges. The funds will communicate intraday indicative values ​​every 15 seconds during normal business hours.

The approval comes as significant activity in existing crypto ETF markets continues, with current Bitcoin products showing BlackRock’s IBIT dominating with $56 billion in assets under management (AUM), with over $4.4 billion in volume.

BlackRock’s ETF is followed by Fidelity ( FBTC ) and Grayscale ( GBTC ), both of which are close behind with around $20 billion in AUM apiece.

Current data from Coinglass reveals significant outflows across major funds on December 19, with negative net movements of around $671 million.

Get comfortable

In August, the SEC said that a longer period for review was required for Wednesday’s ETFs to allow “adequate time to consider the proposed rule change and the issues raised therein.”

Franklin Templeton’s application received “accelerated approval” based on its similarity to previously approved spot crypto exchange-traded products (ETPs). The SEC also noted that it has continued to show high market correlations with CME futures.

One of the key factors that the SEC considered for this filing is surveillance sharing. This setup is an agreement between exchanges to share trading data and essential market information to help detect and prevent fraud and manipulation across connected markets.

The hybrid Bitcoin-Ethereum ETF has demonstrated this with “a regulated market of significant size,” the SEC said, explaining how this new financial product aligns with established commodity-based fiduciary standards.

The approval suggests the SEC is comfortable with a dual-asset framework as long as it fits their standards and correlates enough with established markets. Previously, spot crypto ETFs were limited to single-asset exposure.

“Advisors love diversification, especially in an emerging asset class like crypto,” said Nate Geraci, president of the ETF Store, discusses the approval in a thread on X. “I expect there will be meaningful demand for these products.”

Geraci also noted that it would be “interesting” to see if other crypto ETF issuers would follow suit and launch similar products.

The SEC did not immediately return a request for comment.

Edited by Sebastian Sinclair