Franklin Templeton disclosed that it has submitted application documents to the U.S. Securities and Exchange Commission for two new ETFs. Both products will hold a portfolio of U.S. stocks and will reinvest stock dividends in Bitcoin according to established rules, rather than repurchasing the constituent stocks.
The two products correspond to different indices.
The two products in the application are the Franklin U.S. Equity Bitcoin DRIP Index ETF and the Franklin U.S. Innovation Bitcoin DRIP Index ETF, which track VettaFi's U.S. Large Cap 500 Index and U.S. Innovation 100 Index, respectively.
The document shows that the initial allocation for the relevant index is 95% stocks and 5% Bitcoin. As dividends continue to be transferred in, the Bitcoin position can be increased, but the upper limit is set at 20%, and any position exceeding this will be adjusted back during quarterly rebalancing.
It may take effect as early as the beginning of September.
This submission is still a preliminary application, and the management fee is not yet listed in the documents. According to the application rules adopted this time, the relevant products may take effect in about 75 days. If the process goes smoothly, the earliest launch time may be in early September.
Unlike ETFs that directly allocate to spot Bitcoin, these products channel stock dividend cash flow to Bitcoin, attempting to gradually increase exposure to crypto assets without changing the underlying stock holdings.
Crypto ETFs are starting to compete on their structure design.
This application also reflects a shift in competition within the US crypto ETF market towards product structure. Since the SEC released general listing standards for crypto-related funds at the end of 2025, issuers have accelerated the pace of new product applications.
- The initial Bitcoin weight is 5%.
- The maximum Bitcoin allocation is 20%.
- The product's fee rate has not yet been disclosed.
Market researchers previously predicted that more than 100 crypto ETFs could be listed in 2026. Besides spot products, issuers are competing on yield design and packaging methods, with Franklin Templeton's proposal being the latest example.
Additional information:Franklin Templeton currently operates a spot Bitcoin ETF, established the Franklin Crypto division this year, and entered into a tokenization partnership with Kraken's parent company, Payward; its BENJI tokenized money market fund has been deployed on multiple blockchains.
