Franklin Templeton Files for Innovative Bitcoin Dividend ETFs

Franklin Templeton seeks SEC approval for two new ETFs that use stock dividends to automatically buy Bitcoin, bridging Wall Street and crypto markets.

The asset management firm has filed documents with the U.S. Securities and Exchange Commission (SEC) to launch two new ETFs that blend exposure to American equities and Bitcoin within a single investment strategy. If approved, these funds would be among the first market products to utilize dividend payments as a mechanism to automatically increase exposure to the world’s largest cryptocurrency.

Dividends Will Purchase Bitcoin

The proposed funds—the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF—will employ a Dividend Reinvestment Plan (DRIP) mechanism.

Instead of distributing cash dividends from portfolio companies or reinvesting them back into stocks, these payouts will be directed toward purchasing BTC exposure. This structure allows investors to grow their cryptocurrency holdings without requiring additional capital injections or active purchasing decisions.

Initially, the funds will maintain an allocation of approximately 95% US equities and 5% Bitcoin. During quarterly rebalancing, the digital asset exposure will be adjusted if it exceeds predetermined levels, with the maximum BTC share capped at 20%.

A New Bridge Between Wall Street and Crypto

This proposal arrives as traditional financial institutions increasingly seek ways to integrate digital assets into conventional investment products.

Rather than offering direct and aggressive Bitcoin exposure, these new ETFs target investors who want to remain focused on dividend-paying and large-cap US companies while participating in the potential growth of cryptocurrencies.

The structure mirrors a Dollar Cost Averaging (DCA) strategy, where funds flow in gradually and automatically, mitigating the impact of short-term price volatility on total returns.

To provide Bitcoin exposure, the funds will utilize various instruments, including spot BTC ETFs, futures, options, and other crypto-linked financial products.

Franklin Templeton Expands Crypto Ambitions

These new filings are part of Franklin Templeton‘s broader strategy to penetrate the digital asset sector. The company already manages the spot Bitcoin ETF EZBC and has been actively developing products related to the tokenization of traditional financial assets in recent years.

Major asset managers are steadily attempting to offer solutions that combine the stability of traditional investments with the growth potential of the crypto market. For Franklin Templeton, these new funds could represent the next step toward creating hybrid products that unify dividend income, capital growth, and digital assets in a single structure.

Currently, the funds remain in the regulatory review phase and cannot be offered to investors until they receive SEC approval. However, the filing itself serves as another signal that Bitcoin is transitioning from an alternative asset into a standard tool within traditional financial markets.