Franklin Templeton, a $1.5 trillion asset manager, has filed paperwork with the Securities and Exchange Commission for two new exchange-traded funds that take a traditional investing mechanism and point it at Bitcoin. The funds, dubbed "Bitcoin DRIP" funds, aim to accumulate Bitcoin by automatically reinvesting stock dividends into the cryptocurrency. This approach repurposes the familiar dividend reinvestment plan, a set-it-and-forget-it mechanism used by investors for decades.
The Structure
The two funds, the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF, track proprietary indexes built by VettaFi. Each fund starts with a 95% allocation to US equities and 5% to Bitcoin exposure. The novel part is what happens to the dividends: instead of reinvesting them back into the same stocks, the fund automatically routes every dividend into buying more Bitcoin.
The mechanics are specific, with all regular and special dividends from the equity holdings reinvested into Bitcoin at the market open on the day after each dividend's ex-date. This steadily increases the fund's Bitcoin exposure over time, capped at 20% to prevent it from growing without limit.
Context
The filing is significant, as it points to a shift in how Wall Street is packaging Bitcoin, from simple price exposure to structured products that engineer crypto into the machinery of conventional investing. The Bitcoin DRIP structure creates a recurring, automatic stream of Bitcoin accumulation funded entirely by equity dividends, manufacturing a behavior that is distinct from traditional Bitcoin exposure.
Implications
The preliminary prospectus is dated June 18, and the funds cannot be sold until the registration becomes effective, with the earliest possible launch around September 1, 2026. The structure is worth noting, as it repurposes a mechanism so familiar that its application to Bitcoin is quietly radical, taking the automatic, disciplined reinvestment of dividends and redirecting its output away from more stock and into Bitcoin.
Based on reporting from crypto.news.