Franklin Templeton Launches Two Bitcoin DRIP ETFs on Nasdaq

By Tom Whitfield

Franklin Templeton launched two Nasdaq-listed ETFs that convert dividends from large U.S. companies into recurring bitcoin purchases, with FBEQ assigning 5% of its inception portfolio to BTC. The Franklin U.S. Equity Bitcoin DRIP Index ETF (FBEQ) and Franklin U.S. Innovation Bitcoin DRIP ETF (FIBT) trade on Nasdaq, according to Franklin Templeton's launch announcement.

What regulatory steps preceded the launch?

The launch completed the final regulatory step after Franklin Templeton filed registration papers with the U.S. Securities and Exchange Commission on October 22. The initial filings arrived in June without tickers or fees. Franklin disclosed the completed fund details four months after that submission.

What did Franklin Templeton say about the strategy?

Dina Ting, SVP and Head of Index Investments at Franklin Templeton, said: “Bitcoin has matured as an investable asset, supported by deeper market infrastructure, broader adoption and a growing understanding of the role it can play in portfolios.” She added: “A systematic approach to building exposure is one way to address this next stage of adoption.”

Jeff Masom, Head of U.S. Distribution and Global Wealth Management Private Markets, framed the funds as a way to combine U.S. equities and bitcoin through a differentiated index methodology. FBEQ tracks the VettaFi U.S. Large-Cap 500 Bitcoin DRIP Index, which weights the 500 largest U.S. companies by float-adjusted market capitalization.

As of September 30, the index held 499 stocks ranging from $10.2 billion to $5.5 trillion, with the heaviest concentration in information technology. At inception, FBEQ assigns 95% to those stocks and 5% to BTC. Each regular or special dividend is reinvested in bitcoin at the market open on the day after the ex-date, increasing the BTC allocation with each payment.

The holder makes no exchange-account, wallet or custody decisions. Unlike a conventional dividend reinvestment plan, Franklin's version uses the dividend cash to buy bitcoin rather than more shares of the paying company.

How is bitcoin exposure implemented and managed?

FBEQ holds no bitcoin on-chain. It gains exposure through BTC exchange-traded products, including Franklin's own spot fund, bitcoin futures and options, and depositary receipts.

In some cases, a Cayman Islands subsidiary holds those instruments. Franklin Advisory Services manages FBEQ, with Franklin Templeton Institutional serving as sub-advisor. The fund charges a 0.09% expense ratio and no 12b-1 fee.

How does the bitcoin sleeve stay capped?

At each quarterly rebalance, any bitcoin allocation above 5% is trimmed to 4.5%. If BTC exceeds 20% of the index between rebalances, the index cuts its weight to 4.5% within two business days and returns the proceeds to stocks.

What changes at the next rebalance?

The product remains a stock fund with a bitcoin sleeve, distinct from a bitcoin-only fund. The next quarterly rebalance is the first scheduled deadline for the 5% ceiling. If bitcoin exceeds 20% before then, the two-business-day correction window opens, with proceeds redirected to stocks.