Crypto ETF & Trust News This Week: BlackRock, Grayscale Dominate

Franklin Templeton Proposes Bitcoin & Ethereum ETF to SEC

Franklin Templeton has proposed the Franklin Crypto Index ETF combining Bitcoin and Ethereum, granting investors exposure to both without direct asset ownership. The fund's assets comprise Bitcoin, Ethereum, cash, and short-term instruments, monitored by BNY Mellon and custodied by Coinbase. It mirrors the CF Institutional Digital Asset Index's performance, the first ETF holding both Bitcoin and Ether. 

Issued in 50,000-share blocks, the ETF's value reflects the NAV of Bitcoin and Ether held. While not engaging in staking, the SEC evaluates the proposal's fraud prevention measures with regulated futures markets like CME Bitcoin and Ether Futures for transparent trading.  

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Hashdex Files Amended S-1 for Nasdaq Crypto Index US ETF

Hashdex has amended its filing for a Nasdaq Crypto Index US ETF, progressing towards a potential listing for a spot cryptocurrency index ETF in the US. The ETF will initially include Bitcoin and Ether but may expand to other digital currencies. Industry analysts see crypto index ETFs as the next focus after ETFs for BTC and ETH listed earlier this year. Total US ETF assets exceeded $10 trillion, with significant inflows into cryptocurrency ETFs in 2024. Despite limited SEC approval for assets in ETFs, demand for new types of single-asset ETFs remains constrained.   

Bitwise Introduces "Trendwise" ETF Strategy for Crypto and Treasuries Rotation  

Bitwise recently filed to convert three crypto futures ETFs to trend-following strategies that rotate between crypto and US Treasuries based on market momentum, effective from December 3, 2024. The new "Trendwise" strategy aims to minimize downside risk and improve risk-adjusted returns. Renaming its ETFs under this new approach – Bitcoin Strategy Optimum Roll ETF becomes the Trendwise Bitcoin and Treasuries Rotation Strategy ETF (BITC), and Ethereum Strategy ETF and Bitcoin and Ether Equal Weight Strategy ETF will also be renamed. 

Their new strategy responds to market trends and volatility while leveraging a proprietary signal of market momentum for crypto assets. Bitwise's goal is to capitalize on momentum and minimize downside volatility while potentially improving risk-adjusted returns. The funds maintain their current expense ratios, tax treatments, and require no action from existing investors. 

Bitwise Files S-1 for XRP ETF Amid SEC Appeal

On October 2, 2024, Bitwise filed an S-1 with the SEC to launch an XRP ETF, following their Delaware trust registration. Bitwise's CEO emphasized XRP's enduring appeal for investors. However, the SEC’s recent appeal in its case against Ripple has cast doubt on the ETF’s future, challenging XRP’s non-security status. The appeal, which may extend into 2025, threatens to delay or derail the ETF's approval. This legal uncertainty makes it unlikely for XRP-related financial products to move forward until a final resolution is reached.

Grayscale Launches Aave Trust for High-Potential AAVE Investment  

Grayscale Investments has introduced the Grayscale Aave Trust, offering access to AAVE, a top 20 token expected to perform well in Q4 2024. This trust underscores Aave's potential to innovate traditional finance through blockchain and smart contracts. It follows the debut of other single-asset investment trusts, including Avalanche Trust and XRP Trust. 

Now open for daily subscription, the Aave Trust functions similarly to Grayscale’s other single-asset investment trusts. Notably, Aave V3 has experienced strong growth, surpassing $8.9 billion in total value locked, marking over a 160% increase from the start of the year. Aave V3's key features include isolation mode, high-efficiency mode, and cross-chain functionality, enhancing functionality and user experience.