Franklin Templeton's Head of Digital Assets, Roger Bayston, is exploring the possibility of offering clients packaged investments that encompass entire portfolios of cryptocurrencies. Bayston indicated that diversification is likely to be a key area of interest for clients within the next year.
While single-asset ETFs are generating significant community enthusiasm, Bayston acknowledged that the market will likely see a proliferation of both ETF availability and diversified portfolio options. He noted that on their first day of trading, both Grayscale and Franklin Templeton's new spot XRP ETFs attracted substantial inflows, each exceeding $60 million.
The Growing Demand for Altcoin-Based Funds
Following the successful launches of Bitcoin and Ethereum-based ETFs, financial institutions are actively pursuing the introduction of altcoin-based funds. These new funds are designed to track the performance of popular tokens such as XRP, Solana, and Dogecoin. Bayston expressed optimism about the upcoming phase where Franklin Templeton can extend these offerings to its broad client base, which includes investment advisors and wealth managers.
Bayston highlighted Franklin Templeton's EZPZ fund, which holds both Bitcoin and Ethereum, as a prime example of a diversified ETF. He emphasized that the firm's strategic approach extends beyond single-asset ETFs to encompass diversified exposure.
Projected Surge in Crypto ETF Launches
Eric Balchunas, a Senior ETF Analyst at Bloomberg, has projected that more than 100 new crypto ETFs are expected to launch within the next six months. As of the previous month, there were over 150 filings for cryptocurrency-based exchange-traded products, covering 35 different digital assets.
Issuers have submitted numerous proposals for various ETF structures, including 2x and 3x leveraged ETFs, as well as funds incorporating staking components. This significant volume of proposals followed the U.S. Securities and Exchange Commission's approval of new listing standards.
Traditional Finance Embraces Diversified Crypto Exposure
Even established legacy asset management companies, such as T. Rowe Price with nearly $1.8 trillion in assets under management, have filed to launch their first crypto exchange-traded fund. Nate Geraci, President of NovaDius Wealth Management, commented on X that traditional finance investors may not yet be equipped to independently navigate the complexities of numerous individual digital tokens.
Geraci anticipates that these investors will adopt a diversified, broad-based approach to this emerging asset class. Franklin Templeton's spot Bitcoin and Ethereum ETFs currently manage $501 million and $65 million, respectively. The firm itself oversees a total of $1.7 trillion in assets under management.