Franklin Templeton, a prominent asset management firm with $1.5 trillion in assets, has joined the race to introduce a spot Ethereum ETF in the United States. The firm submitted an S-1 filing to the U.S. Securities Exchange Commission (SEC) on Feb. 12, aiming for approval to list as the “Franklin Ethereum ETF” on the Chicago Board Options Exchange.
In an interesting move, Franklin Templeton has expressed its intention to incorporate staking into the ETF, allowing shareholders to earn additional income. The firm stated in its 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.”
This strategy aligns with the recent trend in ETF filings, with ARK 21Shares also revising its S-1 filing last week to include a staking feature.
Spot Ethereum ETF Staking
Franklin Templeton plans to stake Ether from the trust’s cold storage wallets, and in return, the trust would receive staking rewards, treated as income. This approach adds a unique income-generating dimension to the spot Ethereum ETF landscape.
Several other major players, including BlackRock, VanEck, Fidelity, Invesco Galaxy, Grayscale, and Hashdex, are also seeking SEC approval for spot Ether ETFs. The SEC has specific decision deadlines for each applicant, with the earliest decision expected by May 23 for VanEck and May 24 for ARK 21Shares. The final decisions are anticipated by August 7 for Fidelity and BlackRock.
Bloomberg ETF analyst James Seyffart predicts a decision on all applicants by May 23, drawing parallels with the swift decision-making process for spot Bitcoin ETFs on Jan. 10. Despite earlier optimism, Seyffart’s colleague, Eric Balchunas, has slightly lowered the odds of spot Ethereum ETF approval in 2024 from 70% to 60% as of Jan. 30.
Here’s the most recent table of other filers that I have pic.twitter.com/xCRRMwK76r— James Seyffart (@JSeyff) February 12, 2024
While Franklin Templeton was a late entrant into the spot Ether ETF competition, its recent praise for the network fundamentals of Ethereum and other blockchains hints at a potential expansion beyond Bitcoin, showcasing the firm’s strategic approach to the evolving cryptocurrency landscape.