Franklin Templeton Files for ETFs That Funnel Stock Dividends Into Bitcoin

Global asset manager Franklin Templeton submitted with the Securities and Exchange Commission Thursday to launch two exchange-traded funds that reinvest dividends Bitcoin.

The Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF each hold a basket of US stocks, a VettaFi US large-cap 500 index for one and a VettaFi US innovation 100 index for the other, and then systematically reinvest the dividends these companies pay into Bitcoin, rather than back into the stock.

The ‘DRIP’ in the fund’s name refers to the dividend reinvestment plans that have long been used to compound stock holdings and here are repurposed to accumulate Bitcoin. Each underlying index starts with a 5% Bitcoin and 95% equities weighting, according to the filing, with Bitcoin exposure capped at 20% and scaled back on quarterly rebalancing.

The funds would gain that exposure through cryptocurrency exchange-traded products, including Bitcoin ETPs sponsored by Franklin Templeton affiliates, along with options and futures, and in some cases through a wholly owned subsidiary in the Cayman Islands. VettaFi maintains the indexes.

The filing is provisional. There are no fees listed yet, and under the rule Franklin used, the funds could come into effect about 75 days later, which would mean a possible launch in early September.

The funds would join a rush of crypto ETF launches. After the SEC published generic listing standards for crypto-linked funds in late 2025, issuers could product was rushed to market. Bitwise has predicted that more than 100 such ETFs could be launched by 2026 Bloomberg Intelligence Director James Seyffart counted by the end of last year, there were more than 100 filings in the pipeline, with issuers “throwing a LOT of products against the wall.”

Much of that wave has expanded beyond basic exposure, where BlackRock’s iShares Bitcoin Trust dominates with tens of billions in assets, toward funds that compete on structure and returns. Issuers have been rolled out products with covered call revenue such as BlackRock’s recently launched iShares Bitcoin Premium Income ETF other structured wrapperswith Franklin’s dividend-in-Bitcoin design the latest variation on the theme.

The ETF registrations provide an aggressive push into digital assets for Franklin Templeton. The company runs its own Bitcoin ETF, and this year launched a dedicated Franklin Crypto division through the acquisition of CoinFund spinoff 250 Digital, and struck a tokenization partnership with Kraken parent company Payward. Are BENJI tokenized money market funds now run across different blockchains.