Franklin Templeton Files for ETFs That Automatically Reinvest Dividends Into Bitcoin

TLDR

• Franklin Templeton has filed with the SEC for two new ETFs that use stock dividends to buy bitcoin
• The funds are the Franklin US Equity Bitcoin DRIP Index ETF and Franklin US Innovation Bitcoin DRIP Index ETF
• Both ETFs hold 95% U.S. equities and 5% bitcoin, with dividends automatically reinvested into bitcoin
• The ETFs could launch as early as September 1, 2026, pending SEC approval
• The move follows BlackRock’s recent bitcoin-linked ETF and comes as bitcoin trades below $62,500

Franklin Templeton has filed with the U.S. Securities and Exchange Commission to launch two new exchange-traded funds. The funds would automatically reinvest stock dividends into bitcoin.

The two proposed funds are the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF. Both were registered in a Thursday filing.

The structure is straightforward. Each fund holds 95% in U.S. large-cap equities and 5% in bitcoin. Any dividends paid by the stocks are automatically used to buy bitcoin exposure, rather than being returned to investors as cash.

Bitcoin exposure would be gained through bitcoin ETPs, futures, options, or other instruments. During quarterly rebalancing, any bitcoin allocation above 5% would be trimmed back to 4.5%. A cap of 20% applies between rebalances.

How the Funds Would Work

The first fund tracks the VettaFi US Large-Cap 500 Bitcoin DRIP Index, giving broad market exposure. The second focuses on growth and innovation companies through a related index variant.

As of April 30, the equity index held around 498 securities. Market caps ranged from $7.5 billion to $4.9 trillion.

If approved by the SEC, the funds could begin trading as early as September 1, 2026. Approval is not guaranteed.

The filing is part of Franklin Templeton’s wider push into crypto. Its existing spot bitcoin ETF, EZBC, held $358.9 million in net assets and had recorded $329.6 million in cumulative net inflows as of Thursday.

Franklin’s Broader Crypto Strategy

Franklin has been active in the crypto space beyond ETFs. In May, the firm partnered with Payward, the parent company of crypto exchange Kraken, to explore tokenizing traditional investment products.

Earlier this month, Franklin said it is integrating its BENJI tokenized money market fund into MoonPay Trade. That allows institutional users to swap between stablecoins like USDC and USDT and Franklin’s tokenized fund.

The new ETF filings follow BlackRock’s recent launch of an income ETF that lets institutions use cryptocurrency volatility as a source of return.

The 11 spot bitcoin ETFs in the U.S. have pulled in more than $53 billion in investor capital since launching in 2024, according to SoSoValue data.

Bitcoin has been under pressure recently. The price peaked at $126,000 in October 2025 and has since fallen sharply. It was trading below $62,500 at the time of the filing, down over 2% in 24 hours.

Analysts say the key support level to watch is around $59,000 to $60,000. A close below $61,500 would be seen as a break of the current trend.

A U.S. market holiday on Friday for Juneteenth could add to thin liquidity and price swings in the short term.

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