Franklin Templeton joins race to launch spot ether ETF

The firm detailed its proposed product in an SEC filing Monday

February 12, 2024 03:53 pm

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Franklin Templeton filed for a spot ether ETF, becoming the latest company to enter the race.

“The Shares are intended to offer a convenient means of making an investment similar to an investment in ether relative to acquiring, holding and trading ether directly on a peer-to-peer or other basis or via a digital asset platform,” the filing said.

Other issuers, such as Ark 21Shares and BlackRock, submitted S-1s for their potential funds at the end of last year.

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Franklin was one of nearly a dozen firms to launch a bitcoin ETF back in January after the Securities and Exchange Commission gave the issuers the green light.

According to the Monday filing, Franklin is also interested in staking the ether (ETH) held by the proposed fund. Ark 21Shares updated its prospectus last week to include language around staking. The language had not been included in earlier filings, nor does it appear in filings from BlackRock.

However, Ark 21Shares notably included the language in brackets. The brackets are not included in the Franklin filing.

“The Sponsor may, from time to time, stake a portion of the Fund’s assets through one or more trusted staking providers, which may include an affiliate of the Sponsor (“Staking Providers”). In consideration for any staking activity in which the Fund may engage, the Fund would receive certain staking rewards of ether tokens, which may be treated as income to the Fund,” the filing said.

The language, Blockworks Research analyst Spencer Hughes said, “marks a potential milestone for the intersection of [traditional finance] and digital assets. Currently, ~25% of total ETH supply is staked.”

A decision on spot ETH ETFs is expected in May, and Bloomberg Intelligence analyst James Seyffart believes that there’s a 60% chance that the SEC will approve the ETFs.

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