Global asset manager Franklin Templeton has taken a significant step in the cryptocurrency landscape by filing with the Securities and Exchange Commission to launch two innovative exchange-traded funds (ETFs) that will reinvest dividends into Bitcoin. The proposed funds, named the Franklin U.S. Equity Bitcoin DRIP Index ETF and the Franklin U.S. Innovation Bitcoin DRIP Index ETF, aim to create an investment vehicle that not only capitalizes on the potential growth of equities but also harnesses the volatility and upside of cryptocurrency.
Each of the ETFs is designed to hold a portfolio of U.S. stocks. The Franklin U.S. Equity Bitcoin DRIP Index ETF will track a VettaFi U.S. large-cap 500 index, while the Franklin U.S. Innovation Bitcoin DRIP Index ETF will follow a VettaFi U.S. innovation 100 index. A unique aspect of these funds is that they will systematically reinvest the dividends received from these underlying equities directly into Bitcoin, rather than back into the stocks themselves. This strategy, referred to as “DRIP,” borrows from traditional dividend reinvestment plans typically used for compounding stock holdings and adapts it to accumulate Bitcoin instead.
According to the filing, both funds will start with a 5% allocation to Bitcoin, while 95% will be in equities. However, the exposure to Bitcoin will be capped at 20% and will be periodically adjusted during quarterly rebalancing activities. The Bitcoin exposure will be accessed through various means, including crypto exchange-traded products and Bitcoin ETPs sponsored by Franklin Templeton affiliates, as well as options and futures. In some cases, transactions may involve a wholly-owned subsidiary based in the Cayman Islands. The indices themselves will be maintained by VettaFi.
As this filing is preliminary, it does not yet specify any fees for the funds. Following the regulatory procedures adhered to by Franklin Templeton, the ETFs could potentially launch within approximately 75 days, suggesting an early September debut.
This move is emblematic of a broader trend, as a surge of crypto ETFs has been observed since the SEC established generic listing standards for crypto-linked funds in late 2025. As a result, numerous issuers have been eager to bring products to market. Predictions indicate that over 100 crypto ETFs could be introduced in 2026 alone. Prominent market observers have identified more than 100 filings currently in development, with many issuers adopting diverse structural approaches to distinguish their offerings.
Franklin Templeton’s ambitions in the cryptocurrency domain extend further than this ETF launch. The firm already operates its own spot Bitcoin ETF and has formed a dedicated crypto division following the acquisition of CoinFund spinoff 250 Digital. Additionally, Franklin Templeton has partnered with Payward, the parent company of Kraken, to advance their efforts in tokenization, with their BENJI tokenized money-market funds now available across various blockchains.
The introduction of these ETFs not only reflects Franklin Templeton’s commitment to digital assets but also showcases an ongoing evolution in investment strategies designed to leverage both traditional equities and emerging cryptocurrency markets.
