Recently introduced cryptocurrency exchange-traded funds (ETFs), which comprise Bitcoin and Ether, have experienced only limited investor interest since their launch. The Franklin Crypto Index ETF, managed by Franklin Templeton, has attracted about $2.5 million in net assets since its debut on February 20. Meanwhile, the Nasdaq Crypto Index US ETF by Hashdex has drawn slightly more than $1 million since its launch on February 14.
These figures contrast sharply with the impressive $50 million net inflows seen by Franklin Templeton’s spot Bitcoin ETF on its initial trading day in January 2024. Another example, the Bitwise Bitcoin ETF, witnessed nearly $240 million in inflows on its first day. While single-asset spot Ether ETFs accumulated about $100 million in net inflows on their first day, they still did not match the monumental debut of Bitcoin ETFs.
The new ETFs are designed to offer a diversified index of crypto assets, primarily weighted by market capitalization, which results in a heavy concentration of Bitcoin holdings. As of now, the funds are restricted to Bitcoin and Ether but aspire to broaden their portfolios to include a wider range of cryptocurrencies, subject to regulatory approval.
Currently, the market anticipates that the Securities and Exchange Commission (SEC) will increasingly approve more varied crypto ETFs, including those holding altcoins such as Solana and XRP, potentially by 2025. This optimism follows the SEC’s handling of a multitude of new ETF applications, reflecting the evolving cryptocurrency landscape.
