Key Takeaways
Why is this expansion happening now?
A new SEC-approved Cboe rule allows crypto ETFs to hold a broader set of tokens as long as they appear in their benchmark index.
How will the ETF operate under the new rules?
The fund will rebalance every three months and now allows in-kind creation and redemption using actual digital assets.
As institutions race to expand their presence in the altcoin ETF arena, Franklin Templeton is stepping up with a bold move of its own.
In a recent SEC filing, the asset-management giant revealed plans to widen the scope of its Franklin Crypto Index ETF, adding XRP, Solana, and Dogecoin to a portfolio that already includes Bitcoin and Ethereum.
Franklin Templeton opens its gates for altcoin ETFs
Beginning on the 1st of December, the fund will track an expanded basket of digital assets.
That said, Franklin Templeton’s expansion plans stem directly from new rules adopted by the Cboe exchange and approved by the U.S. SEC.
The new rules would now allow crypto-linked ETFs to hold a wider set of tokens, as long as those assets appear in their benchmark index.
Which altcoins were included?
Under the updated framework, Ripple [XRP], Solana [SOL], Dogecoin [DOGE], Cardano [ADA], Stellar [XLM], and Chainlink [LINK] will be held in quantities determined strictly by the index provider.
This will ensure that the ETF mirrors its benchmark rather than discretionary selection by the issuer.
The fund will also rebalance every three months, allowing its holdings to shift with market conditions or index updates.
Market action reflected that energy
The expansion comes less than a day after Franklin launched its spot XRP product, the XRPZ trust, with a 0.19% sponsor fee.
At the same time, Grayscale also introduced its GXRP ETF with zero fees, signaling intensifying competition as both firms race to capture demand for XRP and other altcoins in the growing ETF market.
This coincided with XRP trading at $2.24, up 8.61% over 24 hours, Solana rising to $137.79, up by 5.54%, while Dogecoin climbing to $0.1507, up by 3.01%, according to CoinMarketCap.
Yet, ETF flow data paints a mixed picture.
Franklin Templeton’s Bitcoin [BTC] and Ethereum [ETH] ETFs recorded zero flows on both the 21st and the 24th of November, suggesting muted investor activity around their flagship products.
Grayscale’s BTC ETF also saw zero flows on the 24th of November, though it logged $61.5 million in inflows on the 21st of November, while the broader Grayscale Bitcoin product added $84.9 million.
Grayscale’s ETHE fund recorded flat flows on both days, but its other Ethereum vehicle saw modest inflows of $7.7 million on the 21st of November and $9.8 million on the 24th of November.
Solana’s Grayscale ETF, GSOL, continued to show traction despite the absence of a Franklin Templeton alternative, bringing in $1.14 million on the 21st of November and $4.7 million on the 24th of November.
What’s more?
All these latest filings, launches, and uneven market reactions show a shifting ETF landscape where Bitcoin and Ethereum are no longer the sole focus.
Flow data shows sentiment remains fragile.
Thus, the contrast between Bitcoin and Ethereum outflows and growing altcoin ETF interest suggests investors may be quietly rotating toward a broader crypto mix as volatility rises.
Source: https://ambcrypto.com/new-sec-rules-open-the-door-for-altcoin-etfs-franklin-moves-first/
