Franklin Templeton filed for two ETFs that reinvest stock dividends into Bitcoin, creating a hybrid structure blending traditional equity income with crypto exposure.
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Franklin Templeton files 2 Bitcoin DRIP ETFs that turn dividends into BTC
Franklin Templeton filed with the Securities and Exchange Commission on Thursday to launch two exchange-traded funds that automatically redirect dividend income from U.S. stocks into Bitcoin, the latest twist in a wave of structured crypto products hitting the market.
The Franklin U.S. Equity Bitcoin DRIP Index ETF and the Franklin U.S. Innovation Bitcoin DRIP Index ETF each track a VettaFi index — a large-cap 500 and an innovation 100, respectively — and systematically reinvest dividends those companies pay into Bitcoin-linked investments rather than back into shares, according to the filing. Each index starts with a 5 percent Bitcoin weighting and 95 percent equities, with the crypto allocation capped at 20 percent and trimmed back at quarterly rebalances.
"The DRIP structure repurposes a decades-old compounding mechanism for the digital asset era," said James Seyffart, ETF analyst at Bloomberg Intelligence. "It gives traditional equity investors a passive way to accumulate Bitcoin exposure without managing a separate crypto wallet."
The funds would gain Bitcoin exposure through crypto exchange-traded products, including Bitcoin ETPs sponsored by Franklin Templeton affiliates, along with futures contracts and options, and in some cases through a wholly-owned Cayman Islands subsidiary. The filing is preliminary and lists no fees yet; under the rule Franklin used, the funds could take effect around 75 days later, putting a potential launch in early September.
A crowded pipeline of structured crypto ETFs
The proposal joins a stampede of crypto ETF launches after the SEC published generic listing standards for crypto-linked funds in late 2025. Bitwise has predicted more than 100 such ETFs could launch in 2026, and Seyffart counted well over 100 filings in the pipeline at the end of last year, with issuers "throwing a lot of product at the wall." Much of that wave has moved beyond plain spot exposure — where BlackRock's iShares Bitcoin Trust dominates with tens of billions in assets — toward funds competing on structure and yield, including BlackRock's newly launched iShares Bitcoin Premium Income ETF.
The ETF filings extend an aggressive push into digital assets for Franklin Templeton, which runs its own spot Bitcoin ETF — the $358.9 million EZBC, which had attracted $329.6 million in cumulative net inflows as of Thursday, per SoSoValue. The firm this year launched a dedicated Franklin Crypto division through its acquisition of CoinFund spinoff 250 Digital and struck a tokenization partnership with Kraken parent Payward. Its BENJI tokenized money-market funds now run across several blockchains.
For traditional retirement and dividend-focused portfolios, the structure offers a mechanism to accumulate Bitcoin without direct wallet management or separate crypto purchases. The trade-off: the Bitcoin component introduces additional volatility, and the use of derivatives and third-party ETPs may create tracking differences versus direct BTC ownership.
This article is for informational purposes only and does not constitute investment advice.
