Franklin Templeton, a global investment management firm, has proposed two new exchange-traded funds (ETFs) that utilize corporate dividends to purchase exposure to Bitcoin. The ETFs, which are pending regulatory approval, aim to allocate 95% of their holdings to U.S. equities and 5% to Bitcoin. This innovative structure allows for an automatic, low-maintenance way to invest in Bitcoin using dividend income from existing equity holdings.
The proposed ETFs, the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF, will hold large-cap U.S. stocks with a focus on broad market exposure and growth/innovation companies respectively. Any dividends collected by the funds will be reinvested in Bitcoin ETFs, futures, or other instruments.
This development follows the recent debut of BlackRock's Income ETF, which allows institutions to monetize cryptocurrency volatility. The move suggests growing institutional comfort with marrying traditional equities and cryptocurrency investments in regulated wrappers.