Franklin Templeton to Launch Altcoin-Focused Crypto Fund for Institutional Investors

Franklin Templeton, managing $1.64 trillion in assets as of March 2024, is reportedly planning to launch a new crypto fund focused on altcoins for institutional investors. This move marks a significant expansion beyond its current offerings centered on Bitcoin and Ether.

According to sources from The Information, the new fund will invest in various altcoins and potentially provide staking rewards to investors. Although the specific altcoins have not been disclosed, Franklin Templeton recently highlighted the Solana network’s impressive growth, with its spot decentralized exchange volume rising by 319% to $1.5 billion in Q1 2024, according to Messari.

Franklin Templeton has been active in the digital asset space since 2018. The firm launched a spot Bitcoin ETF in January 2024 and is among the first issuers of recently approved spot Ethereum ETFs. The approval of these ETFs by the SEC signals a potential shift towards broader acceptance of various cryptocurrencies.

One of the key features under consideration for the new fund is the inclusion of staking rewards. Staking allows investors to earn rewards by participating in the proof-of-stake (PoS) consensus mechanisms of various blockchain networks. This potential inclusion aligns with broader industry trends where staking has become an attractive yield-generating activity for crypto investors.

The inclusion of staking rewards could make Franklin Templeton’s new fund particularly appealing to institutional investors looking for additional income streams from their crypto investments. This strategy not only enhances the fund’s value proposition but also aligns with the firm’s ongoing efforts to innovate within the digital assets space.

In addition to the new fund, Franklin Templeton recently introduced a feature enabling investors to use USD Coin (USDC) to invest in its money market fund, the Franklin OnChain U.S. Government Money Fund (FOBXX). This fund is the first U.S.-registered mutual fund to process transactions and record ownership on a public blockchain, represented by the BENJI token.