Franklin Templeton has taken a bold step into hybrid equity-crypto investing, filing to launch two ETFs that would automatically channel U.S. stock dividend income into Bitcoin exposure.
The firm’s registration, submitted Thursday, proposes the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF, with an anticipated effective date of Sept. 1, 2026. Both funds would track VettaFi indexes (a broad US large-cap 500 Bitcoin DRIP Index and an innovation-focused variant) that convert dividends paid by the underlying stock portfolios into Bitcoin-linked investments instead of leaving them as cash or paying them out to shareholders.
How it would work
- Dividend reinvestment: Dividends from the equity sleeves would be redirected into Bitcoin exposure via spot Bitcoin exchange-traded products, futures, options, or other permitted instruments, according to the filing.
- Starting allocation: Portfolios would begin with roughly 95% U.S. large-cap equities and 5% Bitcoin exposure.
- Rebalancing and caps: Quarterly rebalancing would trim any Bitcoin allocation above 5% back to 4.5%, while an interim cap would prevent Bitcoin exposure from exceeding 20% between rebalances.
Index make-up and scale
As of April 30, the equity index contained approximately 498 constituent securities, with company market caps ranging from about $7.5 billion to $4.9 trillion — a broad large-cap footprint.
Where this fits in Franklin’s crypto push
The filing builds on Franklin Templeton’s expanding digital-asset lineup, which already includes spot crypto ETFs, tokenized funds and blockchain-based investment products. Data from SoSoValue shows Franklin’s spot Bitcoin ETF (ticker EZBC) held $358.9 million in net assets and had attracted $329.6 million in cumulative net inflows as of this week.
Recent related moves
- June 15: Franklin Templeton said it would work with Ondo Finance to issue tokenized ETF versions tradeable directly from crypto wallets 24/7 for investors outside the U.S., covering U.S. equities, fixed income and gold.
- Early June: The firm integrated its BENJI tokenized money market fund into MoonPay Trade, enabling institutional clients to swap stablecoins (USDC, USDT) for BENJI via on-chain infrastructure.
- May: Franklin partnered with Payward (Kraken’s parent) to list BENJI on Kraken as a collateral and cash-management product for institutions and signaled plans to develop more tokenized offerings through Payward’s xStocks platform.
Why it matters
If approved, these “Bitcoin DRIP” ETFs would offer a novel, automated route for equity investors to gain incremental Bitcoin exposure without buying crypto directly — effectively turning dividend streams into a crypto allocation. The structure raises familiar trade-offs: simplified access and dollar-cost averaging into Bitcoin versus added complexity and crypto-related risks within a traditional equity ETF wrapper.
This filing is the latest sign of mainstream asset managers experimenting with hybrid products that bridge conventional markets and crypto infrastructure.
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