The United States Securities and Exchange Commission delivered a landmark decision on December 19, 2024, granting approval to the first-ever hybrid exchange-traded funds that combine both Bitcoin and Ethereum in a single investment vehicle. The regulatory green light for Hashdex’s Nasdaq Crypto Index US ETF and Franklin Templeton’s Crypto Index ETF marks a pivotal moment in the institutionalization of cryptocurrency investing, offering traditional investors simplified exposure to the two largest digital assets through a single ticker.
TL;DR
- SEC approves the first hybrid Bitcoin-Ethereum ETFs in history on December 19, 2024
- Hashdex and Franklin Templeton each received clearance for combined BTC+ETH funds
- Funds use market-cap weighting of approximately 80% Bitcoin and 20% Ethereum
- Combined assets under management are expected to reach $300 million at launch
- Both ETFs are expected to begin trading on Nasdaq in January 2025
A Historic First for Crypto ETFs
The SEC’s approval, documented in filing number 34-101998, represents the first time the commission has authorized exchange-traded products that bundle multiple cryptocurrencies together. Until now, all spot crypto ETF approvals had been limited to single-asset products — either Bitcoin-only or Ethereum-only funds. The decision to permit hybrid products signals a deepening comfort level within the SEC toward the maturation of digital asset markets.
Hashdex, a Brazilian digital asset manager that has been pursuing a comprehensive crypto index ETF for years, received approval for its Nasdaq Crypto Index US ETF. The fund tracks a custom index designed to reflect the performance of the two largest cryptocurrencies by market capitalization. Franklin Templeton, a global investment management firm with over $1.5 trillion in assets under management, had its Crypto Index ETF similarly cleared by the commission.
How the Hybrid ETFs Work
Both funds employ a market capitalization-weighted approach to their allocations. According to Bloomberg senior ETF analyst Eric Balchunas, the funds maintain an approximate split of 80% Bitcoin and 20% Ethereum, reflecting the relative market sizes of the two dominant cryptocurrencies.
“The spot bitcoin/ether combo ETFs have been approved by SEC as predicted. Launch likely in January. They’re market cap weight so 80/20 BTC/ETH approximately. Notable that Hashdex and Frankie are first. Good for them,” Balchunas wrote on social media following the announcement.
The market-cap-weighted structure means the funds automatically rebalance as the relative values of Bitcoin and Ethereum fluctuate. If Ethereum’s market capitalization grows relative to Bitcoin’s, the fund will naturally shift its allocation to maintain the market-cap ratio, requiring no active management decisions from the fund operators.
The Road to Approval
The approval did not come in isolation. The SEC’s decision followed months of regulatory review and multiple rounds of filing amendments from both applicants. The commission evaluated the funds using surveillance-sharing agreements with CME Bitcoin Futures and spot Ethereum data to address market integrity concerns, the same framework that had been applied to earlier single-asset crypto ETF approvals.
Hashdex had been particularly persistent in its pursuit of a diversified crypto ETF, initially filing for a broader crypto index fund before narrowing its application to a Bitcoin-Ethereum combination product. Franklin Templeton entered the race later but leveraged its established reputation in traditional asset management and its existing relationship with the SEC through other ETF products to accelerate its approval timeline.
The simultaneous approval of both applications was notable, suggesting that the SEC preferred to avoid creating a first-mover advantage for either firm. This approach mirrors the commission’s strategy with the original spot Bitcoin ETF approvals in January 2024, when multiple applicants received clearance on the same day.
Implications for the ETF Landscape
The introduction of hybrid Bitcoin-Ethereum ETFs opens a new chapter in crypto investment products. For financial advisors and institutional investors who have been weighing whether to allocate to Bitcoin or Ethereum individually, the combined product offers a convenient one-stop solution. The 80/20 split provides Bitcoin-heavy exposure with an Ethereum kicker, roughly mirroring the allocation that many crypto-native investors maintain in their personal portfolios.
The approval also sets a precedent for future multi-asset crypto ETFs. If the SEC is comfortable with a two-asset product, the logical next step could be funds that include Solana, XRP, or other major cryptocurrencies in a single wrapper. Industry observers have speculated that broad-based crypto index ETFs could eventually replicate the structure of traditional equity index funds, providing diversified exposure to the entire digital asset class.
Market Context
The ETF approvals came on a day when the broader crypto market was experiencing significant turbulence. Bitcoin was trading at approximately $97,491, according to CoinMarketCap, after the Federal Reserve’s hawkish rate decision triggered a sharp sell-off across risk assets. Ethereum was changing hands near $3,414. The combined market capitalization of all cryptocurrencies stood at roughly $3.7 trillion.
The contrasting dynamics of the day — a major regulatory milestone alongside a market-wide sell-off — highlight the evolving nature of the cryptocurrency ecosystem. While prices react to short-term macroeconomic developments, the infrastructure for institutional adoption continues to expand steadily, laying the groundwork for long-term growth in digital asset investments.
Why This Matters
The SEC’s approval of hybrid Bitcoin-Ethereum ETFs represents a significant evolution in the regulatory framework for cryptocurrency investment products. By allowing multiple digital assets to be bundled into a single fund, the commission is implicitly acknowledging that the crypto market has matured beyond the point where each asset requires isolated regulatory treatment.
For investors, the products lower the barrier to diversified crypto exposure. Rather than researching, purchasing, and managing separate Bitcoin and Ethereum allocations, financial advisors can now recommend a single ticker that provides weighted exposure to both assets. This simplification could accelerate the flow of institutional capital into digital assets, particularly from registered investment advisors and wealth management platforms that have been awaiting more structured investment vehicles.
The precedent also has far-reaching implications for the broader ETF industry. As the SEC becomes more comfortable with multi-asset crypto products, the path clears for increasingly sophisticated investment vehicles, including smart-beta crypto ETFs, sector-specific digital asset funds, and eventually comprehensive crypto market index products that track dozens of tokens simultaneously.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, and readers should conduct their own research before making any investment decisions.
80/20 BTC/ETH weighting makes sense for traditional investors who dont want to pick winners. smart product design
filing 34-101998 — first multi-asset crypto ETF. this is the door opening for SOL, XRP, everything downstream
franklin templeton with $1.5T AUM entering crypto index funds. institutions arent dipping their toes anymore, theyre diving in