The crypto world recently witnessed a surge in excitement as Franklin Templeton applied for a Bitcoin exchange-traded fund (ETF). However, according to Santiment, a crypto market intelligence platform, the initial frenzy surrounding this news has quickly dwindled. Per experts, history has shown that moments of ETF anticipation often lead to overreactions in the crypto market.
🥳 Similar to previous crowd hype around #ETF news, the #FOMO surrounding #FranklinTempleton's filed ETF has died down quickly. ETF's should benefit #crypto in the long term. But beware of initial overreactions when this kind of news first goes mainstream. https://t.co/kOyz37bQSS pic.twitter.com/Ki6fpWQnKd
— Santiment (@santimentfeed) September 13, 2023
Bitcoin ETFs have been a hot topic in the crypto space for years. Advocates argue that a US spot ETF could attract over $50 billion in demand and open the doors to a new wave of investors. This optimism was further fueled by recent applications from industry giants like BlackRock and Fidelity, leading to a 20% Bitcoin rally since mid-June.
However, there’s a counterargument. Some believe that ETFs tracking Bitcoin futures already serve the market adequately, making the creation of new spot ETFs unnecessary. This debate has been ongoing for over a decade, with the Securities and Exchange Commission (SEC) repeatedly denying ETF proposals.
Franklin Templeton, a financial powerhouse with roots dating back to the mid-20th century, added to the ETF chatter by applying the “Franklin Bitcoin ETF.” Like other applicants, they intend to list their ETF on the Cboe BZX Exchange and have Coinbase as their Bitcoin custodian.
One notable aspect of Franklin Templeton’s approach is their plan to use the CF Benchmarks Index. This index combines Bitcoin prices from various crypto exchanges to determine prices to prevent potential price manipulation.
In the wake of Franklin Templeton’s ETF filing, Bitcoin experienced a 4% price increase. However, according to CoinMarketCap, the overall trend has been more subdued, with a 0.39% rise in the last 24 hours. Bitcoin’s price currently hovers around $25,911.46, with a market cap of $504,859,103,617.
