US Crypto Index ETFs Off to a Slow Start

Two newly launched cryptocurrency exchange-traded funds (ETFs) holding Bitcoin and Ether have seen limited investor interest in their initial days.

The Franklin Crypto Index ETF (EZPZ), backed by Franklin Templeton, has accumulated approximately $2.5 million in net assets since its launch on February 20. Meanwhile, Hashdex’s Nasdaq Crypto Index US ETF (NCIQ) has attracted only $1 million since its debut on February 14.

By comparison, Franklin Templeton’s Bitcoin-only Franklin Bitcoin ETF (EZBC) saw $50 million in net inflows on its first trading day in January 2024, while Bitwise Bitcoin ETF (BITB) secured $240 million on day one.

Similarly, single-asset spot Ether ETFs recorded weak early inflows, drawing around $100 million on their launch day, July 23.

Limited Diversification and Future Plans

The new ETFs aim to provide investors with diversified exposure to the crypto market by tracking an index. However, their current structure heavily favors Bitcoin due to its dominant market capitalization.

Regulatory restrictions limit these funds to holding only BTC and ETH for now, but they aspire to include a broader range of cryptocurrencies in the future.

In October, NYSE Arca applied for SEC approval to list a Grayscale ETF that includes Solana (SOL) and XRP alongside Bitcoin and Ether.

The SEC is reviewing multiple applications for ETFs holding altcoins, and analysts expect a more diverse range of crypto ETFs to gain approval in 2025.

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