Asset manager Franklin Templeton has filed to launch two exchange-traded funds (ETFs) that automatically reinvest stock dividends into bitcoin (BTC). According to the filings, the funds could begin operating as early as September 1, 2026.

These are the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF. The abbreviation DRIP refers to dividend reinvestment plans, which are usually used to build up a stake in stocks, but this time the mechanism is reconfigured to accumulate bitcoin.

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How the new funds are structured

The funds will track the VettaFi US Large-Cap 500 Bitcoin DRIP index and a related innovation variant. By design, dividends from the stocks held in the fund will be systematically invested not directly into the shares, but into BTC. Thanks to the bitcoin exposure, the funds will gain exposure to exchange-traded products on the main cryptocurrency, futures, options and other instruments.

At launch, the index allocates 95% of assets to large-cap US stocks and 5% to bitcoin. In the event of a significant rise, a BTC share above 5% will be cut to 4.5%, while a ceiling of 20% applies between rebalancings.

As of April 30, the underlying stock index included about 498 securities with capitalizations ranging from $7.5 billion to $4.9 trillion. Thus, the funds give the investor broad exposure to US stocks, while building a growing bitcoin share through dividend income.

Part of a broader crypto strategy

The filing was another step in the development of Franklin Templeton's crypto direction. Its spot bitcoin ETF (EZBC) holds $358.9 million in net assets and attracts $329.6 million in total inflows.

In May, Franklin Templeton entered into a partnership with Payward, the parent company of the Kraken crypto exchange, to explore new ways to tokenize traditional investment products. Tokenization is the issuance of digital equivalents of real-world assets on a blockchain.

Source: BeInCrypto