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DRIP ETFs for Bitcoin
Franklin Templeton filed with the Securities and Exchange Commission on June 18 to launch two exchange-traded funds that would hold U.S. equities while automatically redirecting stock dividends into Bitcoin-linked assets.
“On June 18, the asset manager filed paperwork with the US Securities and Exchange Commission (SEC)”
The proposed funds are the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF, and both would begin with a 95% allocation to equities and a 5% allocation to Bitcoin.
CryptoSlate says the funds would reinvest dividends at the market open on the day after the dividend ex-date, using a rules-based mechanism so investors would not need a direct upfront allocation to crypto.
CryptoBriefing adds that the funds could become effective as early as Sept. 1, 2026, and that DRIP refers to a dividend reinvestment plan repurposed to accumulate Bitcoin rather than additional shares.
CryptoSlate also notes Franklin already operates in the digital asset market through the Franklin Bitcoin ETF, which trades under the ticker EZBC.
Index rules and caps
Both proposed ETFs are built around VettaFi benchmarks, with the Franklin US Equity Bitcoin DRIP Index ETF seeking to mirror the VettaFi US Large-Cap 500 Bitcoin DRIP Index and the Franklin US Innovation Bitcoin DRIP Index ETF tracking the VettaFi US Innovation 100 Bitcoin DRIP Index.
CryptoSlate says each fund would invest at least 80% of net assets in the securities that make up its index and in Bitcoin-related instruments corresponding to each index’s crypto allocation.
To prevent Bitcoin from overtaking the equity base, CryptoSlate reports that at each quarterly review, if the Bitcoin allocation has drifted above 5%, it would be trimmed back to 4.5%.
CryptoSlate further states that an emergency cap would cut Bitcoin exposure back to 4.5% by the close of the second business day after the threshold is breached if a sharp rally pushes Bitcoin exposure above 20% between scheduled reviews.
Crypto Briefing says the funds would rebalance quarterly and that when Bitcoin exceeds its target allocation, the position would be reduced to about 4.5%, while Bitcoin exposure would be capped at 20% between rebalancing dates.
Institutional push and pipeline
Benzinga frames the filing as another step in the rapidly evolving crypto ETF market, saying Franklin Templeton filed with the Securities and Exchange Commission to launch two ETFs that would automatically reinvest stock dividends into Bitcoin.
“Franklin Templeton has filed with the Securities and Exchange Commission to launch two ETFs that would automatically reinvest stock dividends into Bitcoin”
Benzinga also links the move to a broader wave of crypto product launches, noting that issuers are racing to introduce differentiated crypto products following the SEC’s adoption of generic listing standards for crypto-linked funds in late 2025.
CoinDesk describes the structure as creating an automatic, low-maintenance 5% bitcoin feed funded entirely by equity dividends, and says the ETFs are designed to maintain an allocation of 95% in U.S. equities and 5% in bitcoin.
CoinDesk adds that if approved, the ETFs could begin trading as early as September, and it cites SoSoValue data saying the 11 spot bitcoin ETFs in the U.S. have pulled in more than $53 billion in investor capital since their inception in 2024.
CryptoSlate says the SEC approval, fees, tickers, and launch timing remain undisclosed, while the prospectus also states that the securities cannot be sold until the registration statement becomes effective.
