According to foreign sources, two new ETF applications have recently been submitted by Franklin Templeton to the US SEC, and the core design is not a pure bitcoin fund, but rather the introduction of traditional dividends reinvestment mechanisms into bitcoin. According to the article, such products do not necessarily lead to significant incremental purchases in the short term, but are of concern in terms of ETF structural innovations.

The two funds are based on American equity.

According to the application documents, the two funds follow the indices developed by VettaFi, respectively, Franklin US Equity Bitcoin Index ETF and Franklin US Innovation Bitcoin Index ETF. The former is mainly allocated to large United States capitalization, while the latter favours United States innovation and growth.

  • 95% Configure US equities
  • Five percent of it. mouth
  • Not a single bitcoin spot fund.

According to the article, the real special part is not at the initial position, but at the subsequent splitting.

Stock splits automatically switch to bitcoin.

The common DRIP mechanism usually buys the same shares back in cash. The application was replaced by a general and special share of the stock component, which was automatically used to buy more bitcoin.

As described in the document, the relevant purchase will be opened on the next transaction date after the interest-free date. As a result, there would be no need for additional operations on the part of the fund holders, and dividends would continue to be converted into bitcoin configurations within the fund.

  • Total bitcoin convertible ceiling is 20%.
  • Quarterly rebalancing with smaller ceilings.
  • Initial bitcoin weight is 5%

This means that the product logic is closer to the “stock mix + automatic accumulation of bitcoin” rather than simply tracking bitcoin prices.

Focus on product design, not short-term financial shocks

According to the article, the value of such funds lies first and foremost in their design. The spot bitcoin ETF provides one-time price openings, while this type of DRIP structure provides a continuous, procedural bitcoin increase path, with the source of financing the share.

For investors who wish to retain their core stock slots while gradually increasing their bitcoin allocation, this design embeds the regular buy-in mechanism directly into the Fund ' s product itself. The implementation path is more fixed and closer to the use of traditional management products than is done manually.

Encrypt ETF Competition to Structural Innovation

The article also mentioned that the application was not an isolated event but was part of the 2026 encryption of the ETF innovation. As the spot bitcoin ETF has become a mature track, competition between distributors is moving from “is it possible to provide a bitcoin opening” to “how to package such an opening”.

In this context, mechanisms such as enhanced returns, options coverage, portfolio configuration and automatic reinvestment are becoming the main orientations for new product design. This application by Franklin Templeton reflects the trend on Wall Street to gradually embed bitcoin into traditional investment instruments.

Additional information:Currently, the two funds have not been approved and the codes and rates have not been disclosed. Based on the time of application, it could be launched at the earliest in early September 2026.