Franklin Templeton has submitted applications to the U.S. Securities and Exchange Commission for two new ETFs, attempting to combine traditional equity returns with Bitcoin allocations. Under the proposed scheme, the fund will still hold U.S. stocks, but dividends received will be reinvested in Bitcoin-related assets.
Both products maintain a 95% stock and 5% Bitcoin allocation.
The products submitted for approval are the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF. Both funds plan to allocate approximately 95% of their assets to US stocks and the remaining 5% to Bitcoin.
One product offers broad allocation to large-cap US stocks, while the other focuses on growth and innovation companies. The documents indicate that dividends received by the fund will be reinvested in Bitcoin ETFs, Bitcoin futures, or other related instruments.
The core approach is to use dividends to cover Bitcoin exposure.
Unlike directly buying more stocks or retaining cash, these products redirect corporate dividends to Bitcoin-related assets. According to the filings, this essentially sets up an automated Bitcoin allocation channel for the portfolio.
If approved, the two ETFs could begin trading as early as September. Whether U.S. regulators will give the green light remains uncertain, but this filing shows that traditional asset management firms are continuing to attempt to integrate stocks and crypto assets into the same product structure within a compliant framework.
Institutions are still expanding their Bitcoin product lines
The report mentions that this move comes after BlackRock recently launched its Income ETF. Since its launch in 2024, the US spot Bitcoin ETF has attracted over $53 billion in inflows, according to data from SoSoValue.
At the market level, Bitcoin has been under pressure recently. The article states that BTC rose to $126,000 last October but has recently fallen back below $62,500, with a drop of over 2% in the past 24 hours.
However, the core of this report remains the product application itself, rather than short-term market trends. What's more noteworthy for the market is that large asset management institutions continue to design new ETFs linked to Bitcoin, attempting to transform traditional sources of returns into sustained demand for crypto asset allocation.
