Franklin Templeton has foot With the Securities and Exchange Commission launching two exchange-traded funds to channel corporate dividend payments directly into bitcoin, the latest sign of Wall Street seeking to integrate cryptocurrencies into traditional investment structures.
Thursday’s filing lists the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF, with an effective date of September 1, 2026.
The name “DRIP” is inspired by dividend reinvestment plans – which are a mechanism Used for a long time By investors to multiply stock positions over time – and repurpose them to accumulate Bitcoin rather than additional shares.
Both funds were launched with a 95% allocation to US large-cap stocks and a 5% allocation to Bitcoin. The first tracks the VettaFi US Large-Cap 500 Bitcoin DRIP Index, which provides broad market exposure across approximately 498 securities with market caps ranging from $7.5 billion to $4.9 trillion, while the second tracks VettaFi’s innovation-focused variant that focuses on growth companies.
Under the index methodology, profits generated from the underlying equity portfolios flow back to bitcoin-related instruments — including spot exchange-traded products, futures, options, and in some cases a wholly-owned Cayman Islands subsidiary — rather than being redistributed to investors or reinvested in stocks.
The structure creates what one analysis described as an “automatic, low-maintenance 5% Bitcoin feed funded entirely by dividends.”
Quarterly rebalancing rules will cap BTC allocations in excess of 5% to 4.5%, while a fixed cap limits BTC exposure to 20% of the portfolio between rebalancing periods. No charges were disclosed in the initial filing.
Bitcoin exchange-traded funds (ETFs) have become very popular
The proposal arrives amid a wave of cryptocurrency ETF innovations in the wake of the SEC Publishing Public listing criteria for cryptocurrency-related funds in late 2025.
Bitwise predicted the possibility of launching more than 100 ETFs in 2026, and Bloomberg Intelligence counted more than 100 applications in preparation at the end of last year. Franklin Templeton’s Bitcoin dividend design is the latest variation on a theme that has produced covered call income products and other structured wrappers that compete for assets beyond normal spot exposure, where BlackRock’s iShares Bitcoin Trust dominates With tens of billions in net assets.
Recordings expands a wider range of digital assets at Franklin Templeton.
In May, Franklin Templeton I entered Partnered with Payward – the parent company of cryptocurrency exchange Kraken – to tokenize traditional investment products and offer its BENJI tokenized money market fund on the Kraken platform as a collateral management tool for institutional clients. Earlier this month, Franklin Templeton integrated BENJI into MoonPay Trade, enabling institutional users to swap between stablecoins such as USDC and USDT and tokenized funds through MoonPay-connected infrastructure.
And this year, Franklin Templeton too Fired Dedicated division to Franklin Crypto through its acquisition of CoinFund spinoff 250 Digital, holding a separate division deal With Ondo Finance to offer tokenized versions of its ETFs for 24/7 trading of cryptocurrency portfolios, targeting investors outside the US. Combined, these moves position the $1.5 trillion asset manager as one of the most active traditional finance companies in the digital asset space.
The new Franklin Templeton DRIP ETFs join a broader institutional push into Bitcoin at a time when the asset is under price pressure. BTC is trading at less than $62,700 as of Friday morning, more than 50% below its October 2025 peak. close $126,000.
Just this week, BlackRock launched the iShares Bitcoin Premium Income ETF (BITA), a new fund that maintains exposure to bitcoin through IBIT while selling covered call options on 25-35% of its holdings to generate monthly income, targeting annual returns of 15%-25%. BlackRock ETF CEO Jay Jacobs He said The product is designed to appeal to traditional investors by turning Bitcoin’s volatility into a source of income, while offering a less volatile alternative to holding Bitcoin directly.
