Franklin Templeton's New ETFs Could Create a Bitcoin Buying Machine - BeInCrypto
Asset manager Franklin Templeton has filed for two Nasdaq-listed ETFs that will reinvest stock dividends into Bitcoin, creating a regular source of BTC demand.
For decades, index funds have used dividends to buy more stock. Franklin Templeton wants to use them to buy Bitcoin (BTC) instead. The asset manager has filed for two Nasdaq-listed funds, each starting with 95% stocks and 5% Bitcoin exposure.
Index funds invest in baskets of major company stocks. When those companies pay dividends, the money typically goes back into buying more stocks. Franklin Templeton wants to use that money to buy Bitcoin exposure instead, creating a regular source of BTC demand.
Dividend Reinvestment Mechanism
One fund holds the 500 largest US companies, while the other holds the 100 biggest Nasdaq-listed firms, excluding finance companies. Each starts with 95% in stocks and 5% in Bitcoin.
All regular and special dividends are reinvested into Bitcoin at the market open on the day following the dividend ex-date, which increases Bitcoin exposure over time
Automatic Bitcoin Selling
The funds include a unique feature: every quarter, any Bitcoin allocation above 5% gets cut back to 4.5%. If it passes 20% between reviews, it is reset to 4.5% within two business days.
This means a Bitcoin rally triggers selling, while a crash does the opposite, leaving fresh dividends to buy at lower prices. The funds won't hold coins directly but will buy Bitcoin funds, including Franklin-affiliated ones, alongside futures and options.
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