Franklin Templeton Files for Bitcoin ETFs Linked to U.S. Stocks

Franklin Templeton has filed for two new exchange-traded funds (ETFs) that allow investors to route dividend income from stock portfolios into Bitcoin exposure. The proposed ETFs, Franklin US Equity Bitcoin DRIP Index ETF and Franklin US Innovation Bitcoin DRIP Index ETF, will follow indexes managed under VettaFi methodology.

The new structure links equity portfolios with blockchain-based investment strategies for investors. Instead of holding dividends in cash form or distributing them directly to investors, the dividends will flow into Bitcoin-related assets according to the fund's structure.

The initial asset portfolio includes 95% large-cap equities and a 5% Bitcoin position. The quarterly rebalance will bring the Bitcoin position exceeding 5% down to 4.5%. Another control limits the Bitcoin position to 20% between rebalances due to changes in the market price of Bitcoin.

The new ETFs are part of Franklin Templeton's digital assets offering, which includes crypto spot ETFs, tokenized ETFs, and blockchain-based investment vehicles through various investor channels. The company has seen success with its existing Bitcoin spot ETF, EZBC, with $358.9 million in net assets as of Thursday and cumulative net inflows of $329.6 million.