Franklin Templeton has found a way to give retail investors access to digital assets without the need to buy them directly. The financial group with $1.8 trillion in assets has completed the SEC registration of two hybrid funds, Franklin US Equity Bitcoin DRIP Index ETF (FBEQ) and Franklin US Innovation Bitcoin DRIP Index ETF (FIBT).
The instruments have been approved for listing on Nasdaq, and well-known investment expert Nate Geraci described their architecture as "smart product design" that completely changes the usual mechanics of retail cryptocurrency ownership.
The whole idea of the strategy rests on automatic dividend reinvestment (DRIP). The investor enters classic American stocks, but the issuer directs the entire incoming cash flow from them toward buying Bitcoin, relieving the client of the need to purchase coins on an exchange directly.
The division by underlying assets is pragmatic: the FBEQ fund is focused on the 500 largest US corporations, with a record-low annual fee of 0.09%, while FIBT goes into the technology sector (an analogue of the Nasdaq 100) at 0.19%.
What if Bitcoin crashes? (Or, on the contrary, soars)
To implement this mechanism, Franklin Templeton brought in the provider VettaFi, setting strict capital management rules:
- Starting position: stocks make up 95% of the portfolio, and only 5% is allocated to Bitcoin.
- Scheduled review: every three months, the cryptocurrency share is forcibly realigned to 4.5%, automatically channeling profits from a crypto market rally back into stocks.
- Emergency limit: if Bitcoin breaks through the 20% ceiling within a quarter, the system forcibly sells off the excess down to the same 4.5% on the second business day after the anomaly is recorded.
This step is being rolled out on the basis of the company's already proven crypto infrastructure. The group's firstborn, the spot fund EZBC, operating since early 2024, had accumulated a stable $467.27 million in net assets by the end of October 2026, with a daily trading volume of $5.74 million and a minimal discount to its net asset value (0.04%).
The current lull in EZBC inflows only confirms that the market has frozen in anticipation of the new hybrid instruments.
Franklin Templeton's entry onto Nasdaq with fees starting from 0.09% is aimed at attracting conservative capital and retirement account holders. The DRIP model completely isolates the client from the crypto market's infrastructure risks — private keys and exchanges — turning Bitcoin into a by-product of passive income from the traditional American economy.
