Franklin Templeton Files for Ethereum ETF with Coinbase Custody as Ether Custodian
Franklin Templeton has joined the growing list of asset managers applying for an Ethereum exchange-traded fund (ETF) with the Securities and Exchange Commission (SEC). The company filed its application on Monday, making it the latest player in the space alongside BlackRock, Fidelity, Grayscale, VanEck, Invesco, Galaxy, Ark Invest, and 21Shares.
Coinbase Custody will be acting as the custodian for the ETF’s Ethereum holdings, while Bank of New York Mellon will serve as the cash custodian, administrator, and transfer agent. This move by Franklin Templeton is a significant step forward in the company’s foray into the ETF market.
Earlier this month, Ark Invest and 12Shares resubmitted their joint application for a spot Ethereum ETF, making revisions to address concerns raised by the SEC. The revisions were aimed at aligning their application with the recently approved spot Bitcoin ETFs.
Notably, the SEC granted approval to eleven spot Bitcoin ETFs in January, including the Franklin Bitcoin ETF with the ticker symbol “EZBC”. While Franklin Templeton’s trading volumes have not yet reached the levels of industry giants like BlackRock, Fidelity, and Grayscale, the company remains optimistic about the future of its spot Bitcoin ETF. These major players currently account for about 90% of the total trading volume in the spot Bitcoin ETF market.
Investors have been showing a strong interest in Bitcoin-backed options, with digital asset management firm CoinShares reporting $2.8 billion in inflows since the launch of US spot Bitcoin ETFs. These ETFs allow retail investors to participate in the digital asset space without the need to directly hold the virtual assets. Spot ETFs track the real-time performance of the underlying asset.
Meanwhile, Ethereum gas fees have surged to levels not seen since March 2023 due to the increasing interest in an experimental token standard called ERC-404. On February 9, Ethereum gas prices reached an average peak of 70 gwei, equivalent to $60 for a standard transaction. The peak gas costs even hit 377 gwei, a level not seen since May 12, 2023. Various factors have contributed to the soaring gas fees, with the primary factor being the buzz surrounding the ERC-404 token standard. This surge in gas fees highlights the growing demand for Ethereum-based projects and the challenges that come with scaling the network.
Analyst comment
Positive news: Franklin Templeton has filed an application for an Ethereum ETF with the SEC. This move puts them in the company of other major asset managers. The approval of spot Bitcoin ETFs earlier this year has shown potential for the future.
Market analysis: The filing for an Ethereum ETF by Franklin Templeton, along with other large asset managers, indicates growing interest in cryptocurrency investment vehicles. If approved, this could increase accessibility and investment in the digital asset space, potentially leading to increased market activity and trading volumes. However, the surge in Ethereum gas fees may pose a challenge to the usability and adoption of the ERC-404 token standard.
