Franklin Templeton files ETFs routing dividends into Bitcoin

Franklin Templeton filed with the U.S. Securities and Exchange Commission on Thursday to launch two exchange-traded funds that would hold baskets of U.S. stocks and redirect cash dividends into Bitcoin. The funds are named the Franklin U.S. Equity Bitcoin DRIP Index ETF and the Franklin U.S. Innovation Bitcoin DRIP Index ETF and would track VettaFi Bitcoin DRIP indices.

Each fund would follow one of two VettaFi indexes: a U.S. large-cap 500 basket and a U.S. innovation 100 basket. Under the proposed index rules, 95% of each index would be equities and 5% would be allocated to Bitcoin at launch. Bitcoin exposure would be capped at 20% and trimmed back at quarterly rebalances. The DRIP label references dividend reinvestment plans repurposed to accumulate Bitcoin rather than additional shares.

The filing says the funds would obtain Bitcoin exposure through crypto exchange-traded products, including Bitcoin ETPs sponsored by Franklin Templeton affiliates, and through options, futures and, in some cases, holdings via a wholly owned Cayman Islands subsidiary. VettaFi would maintain the indexes.

The paperwork filed Thursday is preliminary and does not list management fees. Citing the SEC rule used in the filing, the funds could take effect about 75 days after filing, which would put a possible launch in early September if the timetable holds. The filings will be subject to SEC review and could be amended.

The applications join a growing pipeline of crypto-linked ETF filings after the SEC published generic listing standards for such funds in late 2025. Analysts expect more than 100 crypto ETFs could launch in 2026 as issuers introduce a range of structures beyond spot Bitcoin, including covered-call income strategies and other structured wrappers.

Franklin Templeton already operates a spot Bitcoin ETF and has expanded its digital-asset business. The firm announced the creation of a dedicated Franklin Crypto unit following its planned acquisition of 250 Digital, has pursued tokenization partnerships and has launched BENJI tokenized money-market funds that operate across multiple blockchains. In a company announcement, Franklin Templeton wrote that “Crypto’s institutional moment has arrived.”