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- Franklin Templeton submits S-1 filing with the SEC to launch the Franklin Trust, an XRP-based ETF, marking its entry into the altcoin ETF race.
- This move makes Franklin Templeton the largest asset manager to apply for an XRP ETF, joining other firms like Bitwise and Grayscale.
- The altcoin ETF filing surge is fueled by crypto-friendly policies, with a growing interest in diverse altcoins such as Avalanche (AVAX), Polkadot, and Axelar.
Franklin Templeton has officially thrown its hat into the ring. On Tuesday, the asset management giant submitted an S-1 filing with the U.S. Securities and Exchange Commission (SEC) to introduce the Franklin Trust, marking a significant step toward launching a spot XRP ETF.
This move positions Franklin Templeton as the largest asset manager to apply for an XRP-based ETF, following in the footsteps of Bitwise, Grayscale, and WisdomTree. The surge in altcoin ETF applications comes amid an evolving regulatory landscape shaped by crypto-friendly policies from the Trump administration, which set the stage for ETF filings beyond Bitcoin and Ethereum.
Franklin Templeton’s filing is the latest in a wave of applications targeting alternative cryptocurrencies. On Monday, VanEck registered in Delaware to launch what is believed to be the first Avalanche (AVAX) ETF. Meanwhile, Grayscale expanded its offerings with a late-February filing for a spot Polkadot ETF. Adding to the momentum, last week, Canary Capital submitted an S-1 registration to launch an Axelar ETF.
The ETF filing frenzy continued on Tuesday, as the SEC acknowledged Grayscale’s Hedera (HBAR) ETF filing and Bitwise’s Dogecoin ETF application. However, progress on several other proposals stalled. The agency delayed decisions on Grayscale’s XRP and Dogecoin ETF proposals, as well as Canary Capital’s Litecoin, Solana, and XRP applications. Similarly, the SEC postponed the next steps for VanEck’s Solana ETF, leaving the fate of these funds uncertain.
Altcoin Market Eyes Growth with Ethereum ETF Staking Proposal
In a parallel development, the Cboe BZX Exchange submitted a proposed rule change to incorporate staking into Fidelity’s Ethereum ETF. If approved, this initiative could set a precedent for integrating staking rewards into ETF structures, a move that may attract additional institutional investment into the crypto market.
Despite the delays, industry experts remain cautiously optimistic. “No surprise… will just take some time. New SEC Chairman not even in place yet,” ETF Store President Nate Geraci remarked on X (formerly Twitter), addressing the regulatory holdups.
While altcoin ETF filings continue to pile up, Bloomberg ETF analysts have weighed in on the likelihood of approval. According to their estimates, Litecoin ETFs have the highest probability of securing a green light, with approval odds standing at 90%. Dogecoin follows with a 75% chance, while Solana and XRP ETFs are estimated at 70% and 65%, respectively.
SEC Crypto Task Force & the Future of Altcoin ETFs
Regulatory progress on crypto ETFs has been incremental. In January 2024, the SEC approved the first U.S. spot Bitcoin ETFs, followed by spot Ethereum ETFs in July. A new crypto task force will evaluate the classification of crypto assets as securities, among other regulatory priorities. Republican SEC Commissioner Hester Peirce is spearheading the task force.
Institutional interest in Ethereum ETFs has seen a notable uptick in recent months. Ownership of spot Ethereum ETFs surged from 4.8% to 14.5% in the last quarter, underscoring growing confidence in Ethereum as an institutional-grade asset. Meanwhile, spot Bitcoin ETF ownership experienced a slight decline, dipping from 22.3% to 21.5%.
With institutional demand driving the crypto ETF landscape and regulatory discussions intensifying, the coming months will be crucial in shaping the future of altcoin ETFs. It remains to be seen whether Franklin Templeton’s XRP ETF and others in the pipeline will receive approval. However, the growing interest signals a maturing market eager for diversified crypto investment products.
Related | Trump Unveils Strategic Bitcoin Reserve to Lead Crypto World
