Asset management behemoth, Franklin Templeton Investments BEN, is seeking regulatory approval to launch a new cryptocurrency index exchange-traded fund (ETF).

What Happened: Franklin Templeton filed an application with the U.S. Securities and Exchange Commission (SEC) seeking approval to launch a new crypto index exchange-traded fund (ETF).

“The fund currently may not hold any digital asset other than bitcoin and ether. It is uncertain whether any digital assets other than bitcoin and ether may in the future be added to the Underlying Index,” said Franklin Templeton in a regulatory filing on Thursday.

As of the filing date, the index was composed of 86.31% Bitcoin BTC/USD and 13.69% Ether ETHER/USD. However, the weightage will be “rebalanced and reconstituted” quarterly in March, June, and December, stated the filing.

Franklin Templeton is aiming to leverage the growing interest in cryptocurrencies, a trend that has been fueled by President Donald Trump‘s victory and his promise to transform the U.S. into the “crypto capital of the world” and to amass a national Bitcoin reserve.

The SEC, which had earlier attempted to restrict ETFs from investing in Bitcoin due to investor protection concerns, greenlit Bitcoin and Ether ETFs last year. This decision has enabled a broader spectrum of investors, including institutional ones, to gain exposure to Bitcoin.

SEE ALSO: Ethereum Faces ‘Intense Competition’ From Solana, Struggles To Compete With Bitcoin: JPMorgan

Why It Matters: Franklin Templeton’s move comes at a time when the cryptocurrency market is experiencing significant fluctuations. Despite a downturn in global market capitalization, institutional adoption is on the rise, with Bitcoin investments being permitted at the state level.

Moreover, the possibility of ETFs for other cryptocurrencies, including meme coins, is not entirely off the table. As Bitwise CIO Matthew Hougan noted, such ETFs would require a liquid, globally distributed market with limited insider influence.

Also, on Thursday, Chicago's Cboe Exchange submitted four distinct applications to the SEC for XRP XRP/USD ETFs on behalf of WisdomTree, Bitwise, 21Shares, and Canary.

This suggests that Franklin Templeton’s ETF if approved, could pave the way for a wider range of crypto-based ETFs in the future.

• READ MORE: Bitcoin Could See A $20B Market Cap Boost From $1 Billion BTC Reserve Purchase, Says Analyst: ‘Could Have Bigger Surges This Year If Central Banks Really Get Involved’

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.