Franklin Templeton Files DRIP-Linked Bitcoin ETFs with 20% Crypto Cap

Franklin Templeton has filed two new ETFs that redirect corporate stock dividends into Bitcoin exposure. The funds, called the Franklin U.S. Equity Bitcoin DRIP Index ETF and the Franklin U.S. Innovation Bitcoin DRIP Index ETF, start with a 5% Bitcoin allocation and are capped at 20%. They will rebalance their holdings quarterly to stay within those bounds.

The funds use a novel structure that redirects dividend streams toward Bitcoin exposure instead of automatically buying more shares of the same underlying stocks or paying out dividends in cash. This mechanism is designed for investors who want indirect crypto exposure without buying Bitcoin outright.

The existing spot Bitcoin ETF, EZBC, run by Franklin Templeton has pulled in $358.9 million in net assets, and the firm's infrastructure and compliance track record suggest it can handle more complex products like these new DRIP ETFs.