The U.S. Securities and Exchange Commission (SEC) has given approval for the launch of combined Bitcoin and Ethereum exchange-traded funds (ETFs) from Hashdex and Franklin Templeton. These ETFs will provide investors with exposure to both Bitcoin and Ether, with an 80/20 split between the two cryptocurrencies.
This marks the first time the SEC has approved a combined crypto index ETF, indicating a growing acceptance of digital assets in traditional financial markets. The Franklin Templeton Crypto Index ETF and the Hashdex Nasdaq Crypto Index US ETF are set to launch in January, following a lengthy approval process that began in May 2024. This approval could potentially lead to other financial institutions exploring similar offerings, increasing competition in the market.
Despite the ETF approvals, the cryptocurrency market has experienced significant turbulence, with outflows from Bitcoin and Ethereum ETFs reaching $671 million and $60 million respectively. This reflects a broader market selloff that has affected various altcoins. The total market liquidations amounted to approximately $1 billion, with Bitcoin's price dropping to $95,000 and Ethereum declining to $3,350.
The outflows from Bitcoin ETFs were particularly notable, with Fidelity's FBTC recording the highest outflow at $208 million. The approval of the combined Bitcoin and Ethereum ETFs is expected to generate significant interest among investors seeking diversification in cryptocurrencies. It may also encourage other major financial players to consider launching similar products, further legitimizing the cryptocurrency market.
The SEC's approval of these ETFs may signal a shift towards greater regulatory acceptance of digital assets, potentially leading to increased participation from institutional investors. Overall, the approval of these ETFs represents a pivotal moment for the cryptocurrency investment landscape, and its impact on market dynamics and investor behavior will be closely monitored.