The competition for a spot Ethereum exchange-traded fund (ETF) is intensifying, with Franklin Templeton, a prominent Wall Street institution, entering the race by submitting a proposal to the Securities and Exchange Commission (SEC).
Franklin Templeton, managing assets worth $1.4 trillion, aims to introduce a fund that allows investors to access Ethereum (ETH), the second-largest cryptocurrency by market capitalization.
According to the firm’s S-1 registration form, the proposed “Franklin Ethereum Trust” would hold ETH and may engage in staking activities through trusted providers. Staking involves locking up digital coins to support blockchain networks, with participants earning token rewards in return. However, staking has drawn scrutiny from traditional finance (tradfi) players and regulators, including the SEC, which has fined crypto companies for offering unregistered securities through staking services.
In January, the SEC approved 10 spot Bitcoin (BTC) ETFs, marking a significant milestone after years of rejections. These ETFs, now trading on stock exchanges, offer traditional investors exposure to crypto without direct ownership. Franklin Templeton was among the firms granted approval for its Franklin Bitcoin ETF.
Several other major players, such as BlackRock, Grayscale, and VanEck, have also proposed spot ETH ETFs. Since the approval of spot BTC ETFs, significant capital has flowed into these funds, contributing to the cryptocurrency’s price appreciation.
Standard Chartered, a British multinational bank, predicted in a recent report that ETH ETFs would likely receive SEC approval by May, indicating growing interest and anticipation within the financial industry regarding these investment vehicles.
