Franklin Templeton, a global asset manager with over $1.6 trillion in assets under management, has filed applications with the United States Securities and Exchange Commission for two exchange-traded funds that would reinvest stock dividends into Bitcoin.
The proposed funds, filed on 8 May 2025, would hold portfolios of US equities while automatically converting dividend payments into Bitcoin, creating what the firm calls “Bitcoin DRIP” products. DRIP stands for dividend reinvestment plan.
According to SEC filings, the Franklin U.S. Large Cap Bitcoin DRIP ETF would invest in stocks included in the Russell 1000 Index, while the Franklin U.S. Equity Bitcoin DRIP ETF would track the broader Russell 3000 Index. Both funds would reinvest dividends into Bitcoin rather than cash or additional shares.
The structure represents a novel approach to cryptocurrency exposure in registered investment products. Traditional dividend reinvestment plans allow investors to automatically purchase more shares of the same stock using dividend payments. Franklin Templeton’s proposed ETFs would instead use those dividends to accumulate Bitcoin.
Franklin Templeton has not publicly commented on the filings. The company has been active in the digital asset space, launching a tokenised money market fund on blockchain platforms and filing for a spot Ethereum ETF in 2024.
The SEC has not yet approved the applications. The regulator must review the filings and can request additional information or reject the proposals. The approval process for novel ETF structures typically takes several months.
Implications for Institutional Bitcoin Adoption
If approved, the funds would provide a mechanism for investors to gain Bitcoin exposure without directly purchasing cryptocurrency or altering their equity allocation strategy. The structure could appeal to investors who want to maintain stock market exposure while gradually building a Bitcoin position through dividend income.
The products would also create consistent, automated Bitcoin buying pressure tied to dividend payments from hundreds of US corporations. The Russell 1000 and Russell 3000 indexes include companies that collectively distribute billions of dollars in dividends annually.
For new markets, where direct cryptocurrency purchases can face regulatory barriers or limited access to exchanges, such products could offer an alternative route to Bitcoin exposure if made available through international brokerage platforms.
Franklin Templeton’s application follows similar innovation in the ETF space. Several asset managers have launched products combining traditional assets with cryptocurrency exposure, though none have yet used the dividend reinvestment mechanism proposed by Franklin Templeton.
The SEC will likely scrutinize how the funds would execute Bitcoin purchases, custody the cryptocurrency, and manage the operational complexities of converting dividend payments across potentially hundreds of stocks into Bitcoin transactions.