Franklin Templeton Bitcoin DRIP ETFs Set for October 27 Launch

Bitcoin DRIP ETFs — Franklin Templeton has cleared the final regulatory step to launch two novel exchange-traded funds that automatically convert stock dividends into bitcoin, with trading set to begin on October 27.

The firm filed a Form 8-A with the SEC on October 22 to register shares of the Franklin US Equity Bitcoin DRIP Index ETF (ticker FBEQ) and the Franklin US Innovation Bitcoin DRIP Index ETF for listing on Nasdaq. A prospectus filed the same day lists an effective date of October 27, providing the last required detail after the funds were initially filed in June.

The ETFs operate by tracking indexes of large U.S. companies. At inception, 95% of the portfolio is allocated to stocks and 5% to bitcoin. Whenever a constituent company pays a dividend, that cash is automatically used to purchase bitcoin at the market open the following day, gradually increasing the fund’s bitcoin allocation over time. The bitcoin exposure is capped and managed through a quarterly rebalancing mechanism.

Franklin Templeton, which launched a spot bitcoin ETF (EZBC) in January 2024, is extending its crypto strategy to traditional equity investors. The DRIP structure allows investors, particularly those holding broad market funds in brokerage accounts, to build a bitcoin position passively through corporate dividend streams without direct custody or exchange accounts.